How to buy real estate in France, French Property advice, Online home purchasing guide
How to Buy Real Estate in France?
26 Jun 2022
There are many specific features in the French real estate market, and it will be difficult to conclude a deal without knowing them. We have collected the details of a real estate deal in France for foreigners.
Rights and Obligations of Foreign Buyers
There are no restrictions on the real estate purchase by foreigners in France. You are allowed to acquire full ownership of all types of properties (residential and commercial) in different regions of the country.
Property search in France
The easiest way to search for real estate is through specialized websites where you can find apartments and houses for sale in France. You will get an idea of the variety of offers and prices.
It is worth exploring famous French resources:
Another good idea would be to read articles and news to learn about the peculiarities of legislation, prices, differences between regions, and the specifics of the property themselves.
Realtors in France
If you are not ready to devote time to the search stage, you can hire an agent and explain your wishes to them. It is not easy for a foreigner to go through the process without knowledge of local laws and market specifics.
Please note: every French realtor must have a certificate to prove the right to provide such services.
If you are not ready to discuss the details of the transaction in English or French, choose companies where the staff speaks your language or hire translators.
The notary is the only mandatory intermediary in the transaction. They are the guarantors of the deal’s legality and security and must check the documents and the technical condition of the property. All payments go through the notary’s bank account, which also deals with taxes and other fees calculation.
Mortgage in France
Foreigners can request a mortgage in France. The main criteria are the solvency of a potential buyer.
The rate depends on the bank financing and the loan terms. The amount of payments should not exceed one third of the declared income. Non-residents can get a mortgage for up to 20 years.
You can also apply for a loan without leaving your country of residence. The documents for signature will be sent to the applicant by mail.
How to Buy a Home in France Step-by-Step
Step 1. Property reservation
After making a choice, the buyer and seller sign a preliminary agreement (compromis de vente) or a unilateral agreement (promesse de vente) – a rarer type of agreement for the property reservation for a particular buyer.
Although the contract is called preliminary, it is a full-fledged legal document that specifies all the details. If you need a mortgage, the contract must reflect it as well as the potential refusal.
The seller is obliged to provide the buyer with documents on the technical condition of the property. Experts conduct examinations of the home and issue the necessary documents to the seller. The diagnostics cost is included in the property price.
If the deadlines are tight, the preliminary contract is signed without the results. But the seller is obliged to receive the inspection results. Without them, you have the right to withdraw from the transaction without any fines.
Preliminary agreement and deposit
The preliminary agreement serves as a bilateral guarantee: to the buyer – that the home will not be sold to anyone else, even at a higher price, to the seller – that the buyer will not change his mind. Notarization is not required.
At the same time, the buyer makes a deposit: 10% of the property (5% – when buying real estate under construction). This money will be kept in a notary’s bank account. Other transactions also go through this account.
According to the law, the buyer has 10 days to withdraw from the further transaction after the conclusion of the preliminary contract (délai de rétraction) and return the deposit (unless other conditions are specified in the contract). After that, the money will not be refunded.
If the transaction fails due to the seller’s fault, they return the deposit to the buyer in double the amount.
Step 2. The main contract
The parties meet at the notary to conclude the main contract of sale. A notary is an official and represents the interests of the buyer and the state. The notary’s task is to ensure the legal purity of the transaction, for which he bears professional responsibility guaranteed by his insurance company.
- A passport.
- A copy of a visa or residence permit.
- Birth, marriage, or divorce certificates.
- Spouse’s passport.
- It may also be necessary to confirm the legality of the funds origin.
Special attention should be paid to the marital status of the buyer: married people will be asked about their marital regime and how the property acquired in marriage is distributed. This is fixed in the marriage contract. Either both spouses or only the buyer can become the owners of the property.
Please note: the property rights of the spouses will be determined according to French laws, but the inheritance right – by the laws of the buyer’s country of residence.
The notary reads the contract out loud. A translator must be present at the transaction if the buyer does not speak the language. Then, in the presence of a notary, the parties sign the main contract of sale – the act of sale (acte de vente).
Step 3. The payment
The whole amount must be transferred to the notary’s account by the time the main contract is signed. The right of ownership passes to the buyer, the new owner receives the keys to the new home and the ownership certificate. After that, the notary transfers the money to the seller’s account. When signing a bill of sale, the buyer pays for the services of a notary.
The new owner must necessarily insure the property. This is monitored by a notary.
Step 4. State registration of property rights
The notary is obliged to register the new owner within a few days in a special registration bureau – the Mortgage Repository (Conservation des hypothèques). In general, state registration takes two-three months. Upon its completion, the new owner receives the final document for ownership – a certificate of ownership.
The buyer pays additional transaction costs to the notary. It includes the cost of the services and state taxes.
- Transaction registration tax: 6-7% of the transaction amount on the secondary market and 2-3% on the primary market. A lower percentage of tax on the purchase of new housing is because all new buildings are subject to VAT (20%), which is included in the price.
- A notary in France receives a fixed fee within 1-4% of the transaction amount: the higher the price is, the lower the percentage. Notary consultations are not included.
- The agent’s commission is 4-5% of the transaction amount. As a rule, it isusually uncluded in the cost of the property.
- Translators: about €350 for each session.
Example of calculations
Let’s use the calculator, from the National Agency for Housing Issues website. Let’s say you want to buy an apartment in Paris on the secondary market for €500,000. In this case, you will have to pay:
- Notary fees, including all taxes: €5,370
- Duties and taxes: €29,033
- Commissions: €1,360
- Property insurance: €500
- Foreigners can buy any type of residential and commercial real estate in France.
- All transaction documents are written in French.
- The seller pays to professional expert to check the property before the purchase.
- The buyer pays for the notary’s services, as well as taxes, duties and fees.
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