Property in France: the buying process

Buying a French property – the process, the search and the purchase itself – can be exciting and highly enjoyable, as long as you use your common sense. The key to a successful, stress-free purchase is doing plenty of research, so you can make informed decisions when the time comes.

This feature summarises the key points you need to know about buying property in France, based on the book Buying Property in France by Penny Zoldan, of Latitudes French Property Agents. Space prevents us from covering every possible angle, so for further reading, see our Living France special offer below.

Getting started

Before beginning your search in earnest, there are several criteria that need to be defined: essentially location, budget, and size and type of property required. Arguably the crucial question is location – everything else about a property can be changed, albeit at a cost. France is a huge country and in order to view a selection of homes, you will need to narrow down your search area. To help you decide, consider climate, accessibility, lifestyle, amenities and activities, and – most importantly – whether your budget will allow you to buy in your selected area(s).

Visiting versus viewing

Before arranging to view any properties per se it is essential to have a good knowledge of the area in which you want to buy. So look before you leap, and do a thorough recce to make sure your expectations will be met. Investigate the travel options, experience the weather and way of life in different seasons, and explore the practicalities of the department(s) in question. By all means do some window shopping by talking to local estate agents about your search, but be honest about your time frame: at this stage you are just looking to get an idea of real estate values and the type of property available locally, in order to choose the location that is right for you.

Getting your finances in order

Before embarking upon your house hunt, you need to know how much you can afford to spend. If you have to sell a property to raise the funds, it is probably best to get it under offer before making any viewing trips. Similarly, if you plan to raise money against your UK home, get this arranged prior to travelling to France.

If buying with a mortgage, make enquiries and get an offer in principle to avoid disappointment at a later stage. Funding your purchase by means of a euro mortgage (as opposed to sterling) reduces the risk of fluctuations in exchange rates. You can apply direct to a French bank (some have offices specifically set up for UK buyers) or deal with a mortgage broker, which can save time and aggravation.

Remember that once you have signed the initial sales agreement (known as the compromis de vente for resales, or a contrat de réservation for new build) you will be required to pay a deposit (usually ten per cent on a resale home) or reservation fee (between two and five per cent for new property). If you are buying a property off-plan and have to make stage payments, the bank will expect you to pay the amount you are contributing to the purchase first before they take over the subsequent payments. For all these reasons, it is important to have your finances in order before viewing properties.

Viewing trips

With the search area defined and financial arrangements in hand, it is time to set up a viewing trip. Between two and six days is a practical length of time – any longer and you will become confused by what you have seen and forget your original requirements (looking at properties is also tiring).

Arrange your appointments before you go, either through a UK-based agency or direct with French agents. Do not base your visit on seeing particular properties, which may well have sold by the time you arrive; better to let the agent know your requirements so they can show you everything that corresponds to your brief.

You will perhaps have chosen a department and, within this, one or more areas; do not try to cover too much ground in one visit. For each property you view, you will need to have a clear idea of its immediate environment and surrounding area. Always go to the area that is your first choice and investigate it thoroughly before looking elsewhere. If you really cannot find what you want there, ask yourself the following questions and modify your brief accordingly:

Is it because of your budget?

Is it because you do not like the type of properties on offer there?

Is it because the area does not offer you what you would like?

Be aware that most properties in France are offered for sale on a multiple agency basis, and that agents guard their commission fiercely. They are loath to reveal too much information about specific properties – UK clients often find French agents’ particulars scanty – preferring to take buyers on personal visits once they have determined your search criteria. Some agents will ask you to sign a form – un bon de visite – prior to visiting any properties; this simply confirms that you are viewing with them, and protects their commission should you purchase a home they have shown you.

The maximum number of agencies you can visit in a day is normally two (one in the morning, one in the afternoon); if you spend a whole day with one agent you may be able to fit in three viewings, but do allow some time to explore the surrounding area, too. Properties tend to be far and wide so you need to allocate time to travel between the properties you are viewing. Make notes, take photographs, and if you see something you really like, arrange to go back the following day.

Next steps

Once you have found a property you want to buy, it is time to commit. New development prices are non-negotiable, but for resales, a verbal offer can be made. Once an agreement has been reached between vendor and purchaser, the agent or notaire draws up a preliminary contract for both parties to sign.

There are a number of different types of contract, depending on whether you are buying an existing property or one yet to be built (ie off-plan). In the case of resales, a compromis de vente is the most common, comprehensive and binding contract, committing both parties to the sale; other contracts offer little protection to the buyer and should be avoided. In the case of off-plan purchases, the buyer signs a contrat de réservation.

Agents and notaires usually have their own pre-printed contracts, which follow a standard design. If the purchase depends on a mortgage application being granted, be sure that the contract includes a clause suspensive (conditional clause) to this effect; other issues (eg obtaining planning permission) can be covered in the same way. Be sure you understand every clause before signing; nothing can be added after signing.

Both compromis de vente and contrat de réservation are subject to a cooling-off period of seven days from the date of a registered letter of notification, which usually accompanies a copy of the signed contract. During this period you can retract from the sale by sending a recorded delivery letter to the notaire or agent – whoever sent the notification; pull out afterwards and you lose your deposit.

It is wise to take legal advice on the initial sales contract, either before signing or during the seven-day cooling off period. Make sure you go to a well-recommended solicitor qualified in French and UK law who can act quickly for you; selecting and briefing them before the viewing trip saves time.

You may need advice on how to buy the property (ie in personal names or as a company). If you are not sure what names you want to use at the point of signing, make sure there is a clause of substitution in the contract to allow you to change the purchaser name(s) in the final acte de vente (completion contract).

Buying off-plan

Once the reservation contract is signed, you will have to wait for the building work to be completed (anything from six to twenty-four months). If buying with a mortgage you will need to make your application as soon as you sign the reservation contract, as there is a limited time for this to be approved or refused. Off-plan properties are paid for in a series of stage payments.

The notaire

A notaire is a legally qualified official who deals with all matters relating to French family and property law. His role is to ensure that the transaction is completed in accordance with French legislation: he carries out local searches, checks the title of the property and ensures there are no outstanding loans on it. He collects all the fees associated with the purchase (except the estate agent’s commission), known as the frais de notaire. Of these, only a small percentage is charged by the notaire himself for his services; this amount is levied on a sliding scale and depends on the price of the property.

Generally speaking, the frais de notaire for a new, off-plan property will be 2.5-3.5 per cent. For properties more than five years old, the amount charged is 6.5-10 per cent; as a rule of thumb, the cheaper the property, the higher the percentage.

The notaire acts on behalf of both parties and is not committed to protecting the sole interests of either purchaser or vendor. The purchaser pays the frais de notaire, and if you wish you can appoint your own notaire at no extra cost (the single fee is shared by both notaires). You can arrange to meet with them to discuss in what name to purchase the property and any other questions relating to inheritance tax issues (be aware that French inheritance tax laws vary from those in the UK and will apply to you, even if you remain a UK tax payer and resident).

Associated costs

In addition to the frais de notaire, other fees associated with buying a French home are registration fees (taxe de publicité foncière), stamp duty (not applicable to newly built homes), land registry fees, and, if relevant, mortgage registration fees (approximately 1.5 per cent of the mortgage amount, payable to the notaire for registering the mortgage at the bureau des hypothèques).

Value added tax at 19.6 per cent is paid on properties less than five years old when they are sold for the first time; most other fees associated with buying property are also subject to VAT at 19.6 per cent.

Estate agents’ fees are worked out on a sliding scale of 5-10 per cent (the cheaper the purchase, the higher the percentage) and are usually included in the purchase price; always check that the price quoted is FAI which stands for frais d’agence inclu or agency fees included.

As the owner of a French property (or plot of land) you are liable for property tax (taxe foncière); owners of new homes are exempt from this tax for two years from January 1 following the completion date. Anyone who resides (as owner, tenant or rent-free) in a property with a rental value of more than €4,600 (£3,318) is liable for residential tax (taxe d’habitation).

Any home with common parts shared with others (eg apartments, or homes on a private estate) is owned through a system known as copropriété. Purchasers own their homes but also a share of areas such as hallways, stairs, lifts, gardens and swimming pools, and share the cost of their upkeep, so it is important to check the financial implications of buying in a copropriété.

Signing the final contract

When the notaire’s work is complete, the purchaser and agent will be informed and a date is set for signing the acte de vente. By this time the purchaser will need to have received the mortgage offer (if applicable) and accepted it; the notaire will then be informed that the funds are available, and he will call for them once the completion date is fixed. It is essential that the buyer’s personal funds are in the notaire’s account as cleared funds on the day of completion, as the notaire has to write a cheque or make a transfer to the vendor’s account on this date.

On the day of signing, all parties assemble at the notaire’s office but it is possible to sign by proxy if you are unable to attend in person. The notaire reads aloud the sales contract and property surveys provided by the vendor. The size of the property, number of rooms, address and so on are stated to confirm that the buyer is purchasing the correct property, and that its description complies with the original contract; the notaire may insist on a translator being present to ensure that the buyer fully understands the contract to be signed.

The contract is then amended if necessary, prepared in triplicate and signed. The buyer is then given copies of the acte de vente. A letter of confirmation of ownership – une attestation – can also be provided on request and is useful when dealing with utilities companies.

In the case of new-build property, the developer or his representative will attend the signing, which takes place when the building has reached ground level. The purchaser is sent a projet d’acte – a copy of the contract to be signed – when the foundations have been completed. Although the purchaser becomes the owner on signing the acte de vente, the property is not finished and stage payments will continue as the works progress, with the final five per cent payment made when the keys are handed over.

Information in this article is based on Buying Property in France by Penny Zoldan (Collins, RRP £8.99).