Buying Property in France

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Practical Information for Buying Property in France

Top 10 Tips
Key Phrases
The French Property Market
How to Find a Property Agent
The Legal Issues
Making an Offer
The Initial Agreement: Sous-seing Prive or Compromis de Vente
Property On More Than 1 Hectare
Surveys
Reports – Asbestos, Lead, Termites
Final Contract
Power of Attorney
French Succession Law
Insurance
Fees and Charges
Tax
Leaseback
Planning Permission
Using an Architect
Permis de démolir: A demolition permit
Permis de construire: A building permit
Déclaration de travaux: Declaration of work exempt from a building permit

Understand the legal process of purchasing property in France
Different rules apply to different property types e.g. farms, vineyards
Make sure the estate agent is a member of a recognised body and meet them first at their offices
You can lose your deposit if after signing the initial contract; you do not complete the purchase in time
The sale becomes binding early in the process – ‘gazumping’ is not a problem in France
French law requires reports on many properties with regard to termites, asbestos and lead
You cannot simply leave your French property to anyone you like in your will
If you are buying a holiday home, check to see what conditions are like in winter as well as in summer
Total costs (fees and taxes) amount to about 7.5% of the property purchase price
Planning rules vary from local council to local council. Always check for advice

Key Phrases
English - French

Estate Agents : Immobiliers
Conveyancing Solicitor : Notaire
Selling Agreement : Compromis de Vente
Final Contract : Acte de Vente
Planning Department : Service d’Urbanisme
Floor Area : Surface hors d’oeuvre nette (SHON)
Demolition Permit : Permis de démolir
Construction Permit : Permis de construire
Declaration of work : Déclaration de travaux

The French Property Market
Different regions of France, and different parts of those regions, will have varying price structures for similar properties. Many local and national factors come into play in deciding the price of property across France, as in any country. Determine your Budget first of all and if you are obtaining a mortgage from an Irish financial institution, make yourself aware of the sum available to you and any terms and conditions applying.

How to Find a Property Agent
There are agents in Ireland who assist in buying French property and of course, French agents (immobiliers) advertise on the web and in magazines and supplements in Ireland. It makes sense to contact such agents before you travel to an area to look at property. A good place to start is the Overseas Estate Agent Search on MyHome.ie. Here you will find a comprehensive list of Irish Estate Agents selling property abroad. It is often the case that Irish buyers prefer to deal with Irish agents which makes the process of buying overseas all the easier.

Ensure that agents in France are members of a recognised professional body - FNAIM (www.fnaim.fr ), SNPI (www.snpi.com) or UNPI (www.unpi.org). This information should be on their website or at their offices. Make sure that you make appointments with agents in France in advance.

Give the estate agent a clear understanding of what you seek in a property. Be prepared for the types of property you are viewing i.e. wear appropriate clothing. Take a good local map and have a list of questions prepared.

The Legal Issues
The French legal system is very different to that in Ireland. It is based on the Napoleonic Code. In France, the lawyer in property transactions is generally referred to as the Notaire. His or her role is different to that of the Irish Solicitor as he / she is a public official whose duty is to the State and to ensure that the entire transaction is carried out legally.

The type of property you purchase will determine the law applicable. For example, buying a farm or vineyard will be subject to different procedures. You should consult legal advice in such circumstances.

Most buyers in France, however, are looking at either an apartment or a small country or seaside house.

Making an Offer
The agent will give you a good idea as to the type of offer that the seller will accept. Remember the French are a very proud nation and a seller may remove their property from the market rather than sell for a price that they consider too low.

The Initial Agreement: Sous-seing Prive or Compromis de Vente
The initial contract is agreed between the buyer and seller. This is called the Sous-seing Privé, if drawn up by a French Estate Agent, or a Compromis de Vente, if prepared by the Notaire. Once it is signed by both the buyer and seller, it becomes a legal document.

The buyer will then pay a deposit of 10% (minimum) into a special account and the property is taken off the market. In some circumstances, a Promesse de Vente may be agreed. Here, the sellers commit not to sell to anyone else within a specified period and a deposit is also paid. There is a seven day cooling off period after the initial contract is signed.

To enable the Compromis de Vente to be compiled you will need to supply various pieces of personal information (birth certifications, marriage certificates, divorce or death certificates, passports) together with any information on financing the purchase, especially mortgages.

You should note that the deposit may be forfeited if you decide not to proceed with the purchase within the agreed time frame.

Property On More Than 1 Hectare
If the property that you are purchasing is on more than 1 hectare, your Notaire / solicitor must inform an organization called the Société d'Amenagément Foncier et d'Establissement Rural (SAFER) which can insist that the land remain in agricultural use. The right of SAFER to do this is rarely exercised but if it does, it supersedes any agreement that you may have.

Surveys
Once the initial contract has been signed, the Notaire will commence a series of searches to ensure everything is in order. This includes issues relating to ownership, rights of way, boundaries, that all buildings have proper planning permission, environmental factors. This will normally take about three months. The Notary will oblige the seller to resolve any problems.

Reports – Asbestos, Lead, Termites
Under French law, in the cases of most properties (depending on location and year built) the vendor must obtain and pay for these reports on the property. You should insist on receiving them before the initial contract is signed. They will be in French so make sure they are properly translated and that you are alerted to any problems.

Final Contract
After the searches are completed, the final contract, the Acte de Vente is signed at the Notaire's office and the property passes to the buyer, who must pay the balance of the purchase price to the Notaire who then pays the vendor. It should be noted that the balance must be in the Notaire's possession before the contract is signed. It will also be necessary to provide to the Notaire before completion a copy of your birth certificate translated into French and, if applicable, a copy of a Marriage Certificate also in French.

Power of Attorney
You may appoint someone in France to sign the contract on your behalf if you are unable to return to the notary’s office. This will require you to fill in a form granting such power to a named individual. The notary may advise you on this.

French Succession Law
French law is quite complex with regard to succession. You cannot simply leave your property to whom you wish. In such circumstances, it is prudent to seek legal advice before the purchase is completed.

Insurance
From the signing of the final contract the buyer is responsible for the insurance of all the buildings on the property. It is a criminal offence in France not to have your property insured

Fees and Charges
The buyer pays all legal fees, costs and registration taxes which average 7.5% of the purchase price. These fees are paid to the notary when signing the Acte de Vente and are paid together with the balance of the purchase price. Estate agents fees that form part of those costs can range from 4 to 10% - always ask! All fees are subject to 19.6% VAT.

Tax
Like in most countries, transfer tax is payable when purchasing a property in France. The tax treatment of rental income and capital gains will depend on whether you buy the property in your own name, through a French company or through an SCI (type of French partnership). It will also depend on whether you purchase a standard property or a leaseback property, the latter of which enables you to reclaim VAT paid on the purchase price.

For further details on French Tax, check out DG International Tax.ie.

Leaseback
Leaseback is another way of purchasing property in France. You sign a rental agreement with the rental company. The agreement is for a minimum period of 9 years and is renewable after that period. This allows you to benefit from the very attractive VAT concession, a saving of 19.6% on the property price.

The French government earns VAT on the rent paid by holiday makers and the repayment of the initial VAT concession is made pro-rata over 20 years. This means that if you sell your home within the first 20 years, the VAT balance (i.e. 11/20th after 9 years) is deducted from the selling price (within the first 5 years, the full amount is deducted). The new owner also takes over the remainder of the lease.

The terms and conditions of leaseback schemes vary so legal advice is recommended.

Planning Permission
Obtaining permission to carry out renovation work is a complex subject. It is therefore essential that before starting (or even planning) any renovation work, you check the procedures that apply in your commune (local council area).

In all cases, you should go first to your local town hall and ask for the service d'urbanisme. In a large or medium-size town, this may be a separate department staffed by an architect who is familiar with the buildings in the town. In a small town or village, the mayor himself and his assistant may deal with everything and will act as your liaison with the Direction Départementale de l'Equipment (DDE), which is responsible for approving all planning applications.
Failure to apply for planning permission can result in the demolition of renovation work and even of the whole building (within a short time) and the payment of a penalty, followed by lengthy and costly negotiations with French administration.

In most cases, reasonable requests for permission are
sympathetically received and, unless your plans are outrageous or your property is listed, are unlikely to be rejected, although certain modifications may be required. In fact, any modifications are likely to be in your interest, and you're likely to receive helpful advice as to the best way to carry out your renovation, which will save you both money and time, as well as ensuring that the result is in keeping with local style and tradition.

Although there's general legislation governing planning applications that applies throughout France, detailed rules and regulations vary considerably from region to region, department to department, commune to commune and even village to village. For example, in Côtes d'Armor in Brittany, you cannot usually obtain a permit to build a house less than 100m from a farmer's field.

For this reason, it's essential to seek advice from people who know your area and can provide information specific to local regulations. Your first port of call, as in most matters to do with renovation, should be your local town hall. Certain rules apply in most areas, including the following:

Rainwater from your roof must not run onto a neighbouring property.
You may not construct a building or plant trees or shrubs within 2m of a neighbouring property.
If a neighbouring wall is over 6m high, any building or plant must not exceed half the height of the wall.

There are essentially three types of permit (described below), and the first thing you must ascertain is which of these you will need (if any) and whether you can submit the application yourself or must employ an architect to do so on your behalf.

Using an Architect
For any project to renovate (or construct) a building over 170m2 you will need a professional architect to draw up plans and make the planning application on your behalf. (You may of course use the services of an architect even if the area of the building is less than 170m2).

Calculating the relevant area, known as the 'surface hors d'oeuvre nette' (SHON), is more complicated than it might seem. All habitable areas must be included (e.g.: the first floor or roof if you're planning to turn this into bedrooms, as well as the ground floor) and measurements must include the thickness of the walls, which must therefore be measured to the outside face. However, the calculation normally excludes garages, basements, open areas at ground level (e.g.: a porch or terrace), balconies and any habitable area where the headroom is less than 1.8m, e.g.: in rooms under the eaves.

A 'demolition permit': Permis de démolir
A 'demolition permit' (un permis de démolir) may be required when you wish to demolish a building on your land, and you should check at the town hall before knocking anything down, irrespective of how dilapidated it is. A permit may also be required to lop or cut down trees or to clear ground for building (une demande d'autorisation de coupe ou d'abbatage d'arbres or une autorisation de défrichement).

A building permit: Permis de construire
A building permit (un permis de construire) is required for any change to a property that affects its taxable value (valeur cadastrale), which normally includes the following:

Any extension to a building, including a balcony or car port, of more than 20m2
Changing the use of a building, e.g.: by converting a shed to a workshop
Creation of additional accommodation, e.g.: by converting a loft or outbuilding
Removing internal walls
Construction of any outbuilding (e.g.: stables, kennels or garage) exceeding 20m2
Enlarging existing doorways or windows or changing their style or inserting new windows (including most types of double-glazing)
Changing the type of roof tile
Erecting fences or walls or replacing a fence or wall with a different type of structure
Installing a septic tank
Digging a well
Installing a swimming pool of over 20m2
Installing a pond of over 50m2
Installing a mobile home in the garden.

Planning permission may also be required for the following:

Changing the colour of external walls, windows or shutters
Removing rendering to expose external stone work or covering stone work with rendering
Creating a roof terrace
Creating a terrace or patio over 60cm high or covering more than 20m2
Replacing front doors
Installing security grilles
Installing solar panels if they affect the external appearance of a building (i.e.: are mounted on the roof) - you may not need permission for panels at ground level
Installing a satellite dish (une antenne parabole) more than 1m in diameter
Removing trees (see Permis De Démolir above).

Déclaration de travaux
A 'declaration of work exempt from a building permit' ('une déclaration de travaux exemptés de permis de constuire', often referred to simply as une déclaration de travaux) is a kind of simplified building permit, which may be all that's required for work that doesn't change the use of a building or create new living space, or for minor alterations to a building, including the following:

The installation of dormer windows or skylights where there's no existing roof aperture (provided these don't overlook a neighbouring property)
An extension of less than 20m2, e.g. a garage, car port, kitchen or conservatory
Constructing an outbuilding (e.g. garage or workshop) of less than 20m2
Replacing roof tiles or other features with identical or similar items or materials (du travail à l'identique)
Raising the height or otherwise altering the line or pitch of a roof
Adding or replacing external doors or windows
Building a swimming pool of less than 20m2.
Adding internal walls
A structure of less than 2m2 and less than 1.5m high
A wall less than 2m high
A patio less than 0.6m high
Greenhouses up to 2,000m2, if less than 4m high
Temporary structures on a building site
Statues, monuments and works of art less occupying less than 40m3 and less than 12m high