The necessity to have a separate accounting for the non-trading real estate company and for personal business. It is a very common system for the persons who want to acquire as a time share property. A partial later transfer of the property is made easier by the transfer of the shares instead of the transfer of the joint ownership right, whether the transfer itself is with consideration or not. If the acquisition is made by several persons (shareholders), the decisions will be taken by the majority of members as defined in the Articles and Memorandum of Association. The shares are considered as movable and are subject to English law as far as the inheritance issues are concerned. It is a transparent company from the tax point of view.
a child) or to someone outside the family. The rate varies from 5% to 40% of the value of the property depending on whether it is left to a close relative (e.g. Inheritance tax will also be payable in France on real property. If, however, you have bought the property through a SCI, you will be leaving the shares which can be disposed of under English law.
There is a general reduction of € 1,000 + 10% reduction on the gain after the fifth year.įrench law applies to real property in France and, if you are married or/and have children, they will inherit a substantial part of the property regardless of any dispositions you may have taken in a will. If you are a French resident, this percentage will increase up to 27%. If you make a gain when reselling your property, capital gains tax is payable in France at a rate of 16% applicable for a duration of 15 years. The “basic” legal fees on the transfer which come to about 1% of the price and will be shared between the two lawyers involved if you have taken independent advice, and other expenses and taxes which amount to about 5% of the price. You should be represented by your own lawyer who will be able to give useful advice. The transfer (“acte de vente”) will be signed in front of the notaire handling the sale. Loans are generally for 15 years and interest rates vary between 3 % and 4 % (2005).Ī property can be purchased by one individual or by several jointly or through a property based limited company (a “Société Civile Immobilière” or “SCI” for short)Ĭompletion will usually take place 2 to 3 months after the contract has been signed. You are entitled to cancel this first binding agreement within a 7 days delay after the signature.Ī loan to purchase a property can be obtained in relation to all or part of the purchase price depending on the guarantees and/or security offered. On signature of the contract you will generally be asked to pay a deposit of 5% to 10% of the purchase price. In most cases, the first contract is a bilateral contract: “compromis de vente” (the most frequent) where there is a binding agreement to buy on the part of the buyer and to sell on the part of the vendor in which you can include appropriate suspensive terms and conditions. This is similar to the exchange of contract stage under English law. Once you have signed the contract you will not be able to make changes.Īs in an English property transaction, there are several stages in the process.Ī bilateral contract: “compromis de vente” (the most frequent) where there is a binding agreement to buy on the part of the buyer and to sell on the part of the vendor. Legal audit: We strongly recommend to carry out a legal audit by lawyer (avocat or notaire) It is prudent to get an architect’s report on the condition of the property. The agent’s commission will be between 5% and 10% of the value of the property. Properties are usually purchased through an estate agent (“agent immobilier”) or a local lawyer (“notaire”). Particuliers / Patrimoine / Immobilier / Logementġ) How do you find a property : real estate, notaire, your own search 2) Before signing the contract 3) A four stage procedureĪ short Guide 1) How do you find a property: real estate, notaire, your own search.
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