How to buy a property in France ?
Foreign buyer : buy a property in France.
The purchase, holding and sale of real estate in France, whether for primary or secondary residences, must comply with specific rules.
Any investor from outside France must anticipate and respect these rules. Here are the most important ones to know.
If you are a foreign buyer, investing in France means that you like quality, attractive real estate that offers good prospects for capital gains. However, you should not overlook certain details specific to French real estate.
Anticipate "notary fees", an essential part of a property purchase.
In France, in addition to the sale price, you have to pay transfer duties (called "notary fees"). These are collected by notaries, who are responsible for recording and authenticating sales contracts.
These fees include the notary's fees, duties and taxes that are paid to the State or local authorities, as well as "disbursements" (sums paid to the land registry, the land registry services or the property manager). For an old house, they amount to between 7 and 8 % of the purchase price. In new housing, they are 2 to 3 %. Since the reform of the "Macron" law of 6 August 2015, these rates have fallen by an average of 1,40 %.
Co-ownership, a French specificity.
Whatever the property, you may be dealing with the concept of co-ownership. Its purpose is to protect your interests and the relations between the various owners of the same property (for example, a building). This French particularity is similar to that of "condominium" in the United States or "comonhold" in the United Kingdom. The rules of co-ownership organise the life of the collective housing between the owners and set out, for example, the voting procedures for undertaking works or the maintenance expenses of the common parts. In a condominium, the syndic is responsible for the administration and management of the building.
Taxation of real estate capital gains on resale.
Profits from the resale of a second home are subject to capital gains tax. This is an obligation for both nationals and non-nationals, although there are a few exceptions : expropriations, property stripping operations, etc.
The tax authorities allow you to benefit from certain allowances after the 5th year of ownership of the property. These result in a total exemption from taxation if you sell your property after 30 years of ownership. However, before the 22nd year of ownership, capital gains are taxed at 19 % for income tax and 15,5 % for social security contributions, so 34.5% in total. If they exceed 50 000 €, they are subject to a surtax in addition to the previous one, calculated according to a scale ranging from 2 % (over 50 000 € in profits) to 6 % (over 260 000 €).
Our advisors are at your disposal to assist you with these issues during your property acquisition project in France.
17 Boulevard de la Croisette
Contact : 04.93.94.91.76