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Buying a house in France has never been easier. The advent of the internet has literally put a wealth of information concerning what is for sale at your fingertips, the number of English speaking people owning a first or second home in France is increasing year on year and thanks to low cost airlines, price wars between ferry companies and the opening of the channel tunnel, mainland Europe has never felt closer.

Even so, you can never forget that France is a different country and things are done differently there. Understand the basics of buying a French house before you set out to find one can save worry, confusion and disappointment.

What does it cost

The cost of a house in France has up to three elements:

The price the seller agrees to accept – which is amount they will receive, net, into their hands the day the transaction is finalized

Any estate agent’s fee. If the house is bought via an estate agent (or immobilier) they will add a fee of up to around 7% which the buyer is responsible for paying. This is paid from the funds you send the notaire (a state employed lawyer who will convey the property to you) direct to the estate agency on the day your purchase completes. If you do not use an estate agent you avoid paying this fee.

The notaire’s fee, which is currently around 8% of the net cost of the house. The buyer is responsible for paying this on the day your house purchase completes. You cannot avoid paying this fee which comprises Government taxes and duties plus payment to the notaire for their work.

The notaire will set out clearly how much you will have to pay for each of these elements as part of the transaction process.

How long does the purchase process take

Allow a minimum of three to four months to buy your house from the moment your offer is accepted. It can be slightly more than that if you require a mortgage or if the property you are buying has a lot of land. If you require a mortgage there can be delay while the mortgage is agreed/authorized. Following that you, as the buyer, have a 10 day period of retraction (a period when you can change your mind about accepting the mortgage offer) before the funds can be accessed. If you are buying a property with what could be considered more than a large garden then the entire property has to be offered to local farmers, who have the right to purchase it (in its entirety and at the price the seller has agreed with you) ahead of any incomer. This is referred to as a droit de pre-emption and is designed to keep agricultural land in use whenever possible. It is very rarely taken up and in the 7 years I worked as an agent in France I never came across a case where it was. However, you have to allow for the process to run its course.

What is the legal process

Once a seller accepts your offer you both need to appoint a notaire to handle the legal and financial process. A notaire is in some ways similar to a British solicitor. However their function is to ensure that the legal process is correctly followed and that taxes and charges are paid. They will not necessarily look after your interests in the way that a solicitor would. It is normal for the same notaire to act for both buyer and seller in a property purchase as the transaction is seen as an administrative rather than an adversarial process. You can appoint separate notaires if you wish. It will cost you no more (they share the fee) but can delay proceedings because of the extra level of communication it creates. You may also want to appoint a specialist solicitor from your own country, for which you would bear the full cost. If you sell a house through French Properties Direct remember that you are saving the estate agent’s fee – so a small proportion of that spent on employing a solicitor could be money well spent. Unlike a notaire your solicitor will act specifically in your interest and their advice can be invaluable. A competent notaire is happy to work with a solicitor – some have even told me that they prefer it because it facilitiates the buyer’s understanding of the process.

Remember the buyer not the seller pays the notaire’s fee – even if two notaires are appointed. Your seller will have used a notaire to buy the house originally so expect them to recommend one. You can research more about notaires at:

www.notaires.fr/en

You will also find and excellent guide to the legal process, in English, on this site as well as lots of other useful information.

There is also an app you can download which calculates notaires’ fees on any transaction.

There are two contacts which are signed during the transaction process

  1. The compromis de vente (sometimes called a sous-seing privée) which is usually signed within a month of the price being agreed. This is a lengthy document detailing what is being sold by whom and to whom and giving a date by which the transaction must be completed. It sets out what must be proved before the sale can go ahead and makes provision for any special circumstances which have to be taken account of before the sale can be finalized. Once both buyer and seller have signed the compromis, the buyer has a ten day period of retraction, during which they are allowed to back out of the sale without penalty if they change their mind. Note the seller does not have this facility and if the buyer is buying in the capacity of a company rather than as a private individual then they forfeit the right to a period of retraction.
  2. Several months after the compromis has been signed the acte authentic is signed and the transaction is complete. The acte authentic is a shorter document than the compromis and basically checks that all of the provisions in the compromis have been fulfilled. Once the acte authentic has been signed and the funds have changed hands the property is yours and will be registered as such with the French land registry, or publicité fonciere.

When do I pay for the property

You will normally be asked to pay up to 10% as a deposit when you sign the compromis de vente. At this point the notaire may also ask you for a small, non-returnable, sum which is to cover their administration costs and which is offset against the final balance you have to pay. The deposit would be returned to you if one of the clauses specified in the compromis de vente is not established and the sale, as a consequence, does not go ahead, or if you retract within the seven day period.
The balance of the sum due to the buyer, plus the estate agent’s fee (if there is one) and the balance of the notaire’s fee must be cleared into the notaire’s bank account before the day of completion.

The notaire will send you a RIB (their bank account details) which will give the IBAN number of the bank account the deposit and balance have to be sent to. This is a government account and not the notaire’s private bank account. It is worth mentioning that by using a currency exchange specialist rather than your high street bank to transfer funds you can save thousands of euros in transaction costs. Have a look at the web site below, which is for Smart Currency Exchange, where you will see examples of what a currency exchange specialist can offer both in terms of a competitive rate of exchange and different methods of currency purchase which can enable you to benefit from currency fluctuations.

http://www.smartcurrencyexchange.com/landing/SCE_TradersGuide.htm?source=SCEP_TG&refSrc=Introducer&refBy=207843

What other taxes and charges are attached to a house in France

There are two annual taxes which home owners pay. Both taxes are paid by the person who owns the property on January 1st:

Tax Foncier – this is a tax on the property itself and is paid annually, usually in October, at the end of the year in which it is due. In the year in which you buy your house you will pay your pro-rata share of tax foncier direct to the seller when you sign the acte authentic. The notaire will calculate what your share is. Thus, even though you may be the legal owner of a house in October when the tax is due the previous owner will pay it because they owned it on the first of January that year.

Tax d’Habitation – this is a tax based on the occupancy of the house and can vary according to the financial circumstances of the occupant. It is normally paid in or around December for the year in question. The tax is paid by and is the full responsibility of the occupant of the house on January 1st. You will not be asked to contribute to this for any part of the year in which you buy your house – as long as you complete the purchase after January 1st.

Therefore, if you buy a house in, say, 2015 the first time you will receive a bill in your own name for either tax foncier or tax d’habitation will be at the end of 2016. The notaire will advise the tax authorities that you have taken over ownership of the property as part of the registration process.

You will need valid buildings insurance from the day you sign the acte authentic. The notaire will not allow you to take ownership of the property if you do not have documentary proof that this cover is in place.

You will also, of course, have to open accounts with water, electricity and gas companies and set up telephone and internet. Ask the seller for a copy of their last utility bills which will give the contact telephone number and account references which you will need to open the accounts. Most utility companies now have English speaking help lines and you can also have a look at our useful links page for more guidance as to who can help you establish yourself in France. Our blog and latest news window also provide regular updates and topical comment on the house buying process.

You should have a French bank account before you can open your utility accounts.

Finally…

When you buy a house in France you are also buying into a lifestyle. French towns and villages, no matter how big or small, are administered by a Maire who operates from a mairie in the centre of the commune (village or town). It is an act of courtesy to go along and introduce yourself at the mairie as soon as you are able to. Not only is it a good thing to be known and known about, but the maire, or more particularly his or her secretary, will be a font of useful knowledge and can help you with everything from getting your car registered in France to applying for planning permission for all of the renovation work you have in mind for your new house.

As a post script - log into our blog from time to time. We feature relevant topics and other buyers and sellers contribute via our comments section. We also feature guest bloggers who are specialists in the legal, financial and property markets.
Our latest news section on the right hand side of our home page is also somewhere to go to for current developments and updates.

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