The following note has been prepared by Monaco Villas to assist potential purchasers of property in France, and should be read in conjunction with advice to be taken from Professional Financial Advisers, as individual circumstances may vary from one person to another.
The purchase and sale market in France is almost entirely controlled by the real estate agents. The procedure is not complicated. However, a purchase can take a long time (up to 2-3 months) owing to sometimes lengthy waits for information from the authorities. There is no need to be a citizen of, or resident in France to buy property there.
The procedure and costs involved are as follows:
- Once a suitable property has been indentified and a price agreed, a "Compromis de Vente" is entered into. This document is binding on both seller and buyer to complete the deal, subject to the conditions contained in it. French law allows a "cooling off period" to the buyer (not the seller) to withdraw from the contract within 7 days of the signature of the Compromis de Vente. After 7 days, the buyer is committed to adhere to the terms of the Compromis the Vente in the same way that the seller is. Normally the Compromis de Vente will contain a date (Completion Date) at which the "Acte the Vente" or "Acte Authentique" is to be signed and the transfer of title takes place. This document is a Notarial Deed and constitutes the transfer of title. The Compromis de Vente normally allows the buyer to assign his rights and obligations under the agreement to a third party (personal or corporate) which allows the buyer to structure his/her ownership in the most effective way.
- On signature of the Compromis de Vente, a 10% deposit is normally lodged. This will normally be held by the agent or by the Notaire. The balance of the consideration (90%) is due on the date of signature of the Acte de Vente.
- Other fees due at that time by the buyer are as follows:
Registration/Notaire fees, usually around 7% of the price but can be lower in certain circumstances, including where the property is less than 5 years old
As far as the market itself is concerned, the sale markets are very tight owing to an unprecedented demand for second homes in the South of France currently being experienced. For more detailed information on procedures and tax and inheritance implications in particular, you are recommended to consult your financial adviser, or we can recommend you to one if you prefer.