Taxes and fees for property owners in France
The initial purchase of a property in France will incur various fees and taxes.
While the real estate market in France is well regulated and most purchases go through with no problem at all, buyers should obviously apply basic precautions in order to avoid deceptions. It has been known for an individual posing as the owner of a property to ask for a deposit paid in cash, and then disappear, leaving completely worthless paperwork behind him!
The good thing about 'paperasse' is that there's a lot of certification of all kinds of professionals which you can - and should - check. Most estate agents will ask you to visit their office. Make a point of checking the carte professionelle which is displayed there and take a note of the total amount of the agent's financial guarantee - this is what covers your deposit if it is paid to the agency. You should also check the SIRET number of any agents or building professionals you use - that's the French business registration.
French builders have to offer an assurance décennale (ten year insurance) covering any defaults in their work for ten years. If you are buying a new build, or a house built in the last few years, or if the property you are looking at has had substantial recent renovation or extension, check the paperwork and make sure it's in order.
|Do agents represent seller’s interests? Will it be more expensive for me as a buyer to work with the agent?|
|Agents in France have traditionally been paid their fees by the buyer, not the seller - though this is changing (look out for 'HAI' or 'FAI' which means the seller pays the fees). Obviously, though, they need to sell the property to collect a fee. In fact, they are purely intermediaries and do not have a duty to offer advice to either buyer or seller. Only 50% of sales in France go through an agent; many are advertised by a notaire, and others are 'particulier à particulier' contracts made between private individuals following adverts online. These can be cheaper, but you will need to be wised up to the way things work in France as well as able to speak fluent French if you want to take the latter, cheaper route!|
Some French agents will ask purchasers to sign a 'lettre d'intention d'achat' before the compromis is prepared. In English, this sounds innocent - but in French law, it can be held to constitute a binding contract. That would then prevent you introducing conditions into your compromis, such as making the purchase conditional on being able to arrange a mortgage. (Note, though, that you still benefit from the ten day cooling off period, so you can cancel - but that would be a waste of everyone's time.)
Paperwork is very important and not always easy to steer a way through, so that some vital issues drop through the cracks. For instance, owners have been known to provide a diagnostique for the property on sale that is several years old and may not accurately represent the current condition of the property - so always check the date.
Finally, 'under the table' deals are completely illicit, but that doesn't stop some vendors asking. One notary confessed that he had looked out of his window once, after handling a property transaction, only to see the purchaser handing over wads of money to the farmer who had sold off his barn. Unfortunately, if you engage in such a deal, when you come to sell, the notaire will base your profits on the documented purchase price - not the extra cash.
It should also be noted that while French searches are very thorough in some ways, they don't include a search for planning permissions granted in the vicinity of a property. You will need to go to the mairie (town hall) to check what applications have been made and what work is pending, or have someone do that on your behalf.
If purchasing off-plan from a developer, always check their reputation - but also find out how many units in a development have been sold, as sometimes construction will not be started until a certain percentage of sales has been secured. Stage payments are usual, so any request for immediate payment of the full amount should ring alarm bells.
With rural properties, including those in quite large villages, you may find the property is not tout à l'égout (on mains drainage). Regulation of septic tanks is now quite tight, and owners are required to ensure that they comply with those regulations within two years of taking over the property. That can cost EUR 10,000 or more, and in the case of village centre properties without a sizable garden or with limited access it can be costly enough to make the investment unviable. If in doubt, take advice.