Buying a house in France - 2021 Edition

Finance, Taxes, Banking, Insurance and Retirement
1
Sorry, lots of questions .

The most recent thread on this topic was last updated in 2012 so I'm guessing things have changed since then? Hopefully someone here has been through the experience and can share additional tips and wisdom. In addition to visiting the house in person and asking questions, we've done a ton of research online. The problem is that so much information is conflicting or incomplete.

Offre d'achat (offer to purchase) - Seems like this doesn't need to be a formal, signed document although some sellers would like it. Some sites say if you do prepare a document, include everything such as the appliances and toilets! Others say you don't need that much detail. Some sites say you can take 30% off the asking price in your offer and not offend anyone, but I find that hard to believe. We'd like to offer 10% less than asking. Is that acceptable? Or is that stupid and we'd be overpaying?

Compromis de vente (initial contract) - Clearly necessary and legal, but how do we get to that point? It's supposed to contain all the legal details, yet from what we've read it is only after the cdv is signed that the notaire starts searching deeds and whatnot. In addition, if the offre d'achat is legally binding, what is the recourse if the notaire's search turns up red flags?

Conditions suspensives (conditional clauses) - These seem critical, but how detailed does one need to get? Some sites say include the kitchen sink (see above) but others say keep it simple.

Costs in France - We've been told that on French side, our costs are the home itself as agreed with the seller, and the notaire fee of 8% which includes all the taxes and fees. Any solicitor or surveyor we hire would be extra. We'd also owe tax foncière and maybe tax d'habitation and basic running costs even when we're not there. Anything else? How many days can we visit our holiday home without being considered French residents for tax purposes? Has anyone hired a surveyor? There are mandatory reports the seller has to obtain but they don't check thinks like the roof, etc.

Costs in CH - So far we figure: Notaires here for signatures, loan startup costs, small mortgage. The house will add to our overall wealth but the mortgage will offset. The mortgage interest and some maintenance costs are deductible, but figuring out what is deductible is proving challenging. And of course our usual living costs we already have.

Thanks for any advice!

2
Regarding a surveyor.

The seller is required to provide you with a "house diagnostic", this already covers quite a bit & will give you an idea in which state the property is.

https://immobilier.lefigaro.fr/annon...cs-immobiliers

Extensive info on surveyors on France

https://www.justlanded.com/english/F...operty/Surveys

"Beginners guide to buying property in France"

https://www.justlanded.com/english/F...erty-in-France

3
A few things to be aware of as I have a number of colleagues who have bought/sold property in France.

-beware of the pre-emptive right to buy rights of the Mairie or Commune when buying property. Due to these rights, they technically have first dibs on all property that comes up for sale. While exercising this right is rare, it does drag out the process. I think I heard it had to wait a month or so to see if the Maire would exercise this right or not.

-French property/habitation taxes are not cheap as I understand

-Getting tradesmen to work on the house can be a challenge especially in border zones where they find work more lucrative over the border.

4
Tax residency - France

https://www.cabinet-roche.com/en/fre...183-days-rule/

5
In case you were looking at Marseille

The housing tax on furnished second homes in Marseille will be sharply increased. The current increase in this tax, about to be abolished for main residences, will rise from 20% to 60% . This decision, unveiled by La Provence , is on the agenda of the municipal council scheduled for October 1, as 20 Minutes was able to verify.

https://www.20minutes.fr/economie/31...es-secondaires

6
Buying a house cannot add to your wealth! Unless you have undeclared assets or cash under the mattress that you are throwing into the purchase.

There is capital gains tax on profits from sales in France, I think...

7
Thanks for all the links. Despite what I thought was extensive searching, all links posted so far are not ones I'd seen!

Yes, I read last night about that. The areas that are raising the tax are called "zone tendue". I guess the idea is to cut down on AirBnB setups that often avoid tax, and to and flipping/speculation.

You can search on service-public.fr by postal code. Thankfully the place we're considering is not in a zone tendue.

There's also a list here I found via a search. It looks pretty comprehensive:

https://www.fournisseurs-electricite...es-zone-tendue

8
Once you have a second residence in FR, they will never let you go. lol. For five (5) years after we sold our house in Alsace (not our main residence) and moved out of the country, the French authorities sent us tax statements for the period we'd been gone.

9
I suppose things offset. The home counts as an asset and the mortgage as a liability. The cash we will put into it was already factored into our wealth/assets for tax purposes on the last tax return.

We'll end up spending some funds that can't be deducted as expenses, so our overall wealth will probably go down in the short term.

Yes, I believe there are capital gains and they can be quite steep if you sell early. No plans to sell any time soon. We'd like a holiday home for now and retirement home for later.

10
what exactly do you mean by tax statements?

11
I misremembered...it wasn't taxes. They first argued we'd owe health/social insurance contributions. I forget what period that was, because everything they sent us made no sense (and we speak fluent French). Our tax situation was so convoluted, and we were also taxable in DE. Then we moved to BE, and the FR folks continued to pursue us. We then moved to the US, where the FR authorities used to send us demands for both habitation taxes and insurance. OH just reminded me that it was almost 10 years!!

3Wishes...set up an SARL and have the company buy the house. Anything else may get you into an interesting situation with the tax authorities. Also you need a good attorney and tax advisor.

12
May I ask which area you are searching in?

* In the offre a'chat, add any conditions that are especially important to you, eg, our offer is subject to the following: existing fixtures to be included.

* For negotiations, 10 -15% can often be reasonable. 30% sounds like too much. Asking price depends where and how popular the area is. Do be conservative with your bid, it is not like Zurich where you start bidding more than the asking price immediately sometimes!

* From what I saw, once an offer was accepted by the seller, their notaire would draw up the initial contract. Once the seller signs it, they are obliged to sell the property. Once the buyer signs it, a 10 day cooling off period starts in which only the buyer can pull out, without penalty.

* For suspensive conditions, this depends on each situation. Making things specific in my experience avoids legal troubles, so if you have any doubts and the conditions are fair, put them in. Your notaire should also be able to help you here.

* Your summary of the fees may be about right, depending on where you are buying it can change. Where we looked, it was about 7.5% total. However, only 1% of this is the notaire fee, the rest are taxes such as stamp duty etc, although most people seem to lump this together into "notaire fees" The notaire will handle all this for you, and it will still come up to the same amount either way I suppose.

* Your summary of the other costs sounds right. The two main taxes can vary quite a bit depending on the state the property is in, in my experience.

* Other people have talked about the DDT. It is fairly comprehensive, especially if you coming at it from how it's done in Switzerland, though general opinion is that it is perhaps slightly less extensive than it can be from having a survey in the UK. Mostly though it should provide enough confidence. If there is something that stands out, outside of this, get it checked independently or ask your notaire.

I'll just say that my views are from my amateur experience of looking for properties in France, so don't take them as gospel. Well, perhaps gospel according to krlock3 :-)

13
@krlock3

We're looking in the Carcasonne area. Not really a hotspot, I don't think. Thus why we think 10% below asking is probably safe offer.

The DDT does look comprehensive on the "big issues" but we feel we should be mindful of small ones too. In the States (I know, it's not CH or France), the buyer hires someone to check the issues that one doesn't normally check when doing a basic visit: all light fixtures and outlets working; faucets, toilets, showers, etc. functioning properly and not leaking; hot water heater in good nick; roof in good shape; kitchen fixtures functioning properly, etc.

We don't know who the notaire is yet. We have read that as the buyers we can choose, but that since notaires are employed by the government it is okay to use the one recommended by the estate agent. There are plenty of notaires in Carcasonne, many of whom speak English according to the profile on notaires.fr.

14

Notaire's fees can be calculated from this link - https://www.immobilier.notaires.fr/fr/frais-de-notaire

15
This thread recently came onto the French expat forum, might be of interest. There are lots of others so might be worth your while having a browse through if you are serious about buying in France.

https://www.expatforum.com/threads/n...#post-15275079

16
The sale is really split between heritable (bricks and mortar) and moveable, which is pretty much everything else. It's not uncommon for sellers to turn off water and remove kitchens here.

Drainage, super important to ensure you have confirmed if it's mains or fosse, if the later, add a clause for it to be emptied (regardless of when you are told it was). A person here is in tho merde, as they bought, and the black water went into a pond, the fosse was disconnected and they could not claim Vice Cache as they never asked, and as there was no fosse there was nothing in the report, so had to pay to sort it out... took months, and thousands, so a hard lesson.

If it has a CH boiler on oil, ensure that you have a service and report done on that to ensure servicability, AND if it's oil the tank inspected. Penalties for contamination are massive especially as you have a stream on the property.

In this part of France normally the notaire who completed the last sale does the next, as they often hold the deeds so it's common for the seller to let the agents know who that notaire is. You can get your own, but the notaire acts for the state, so no conflict of interest to use the same notaire, getting you own really add's nothing but time and cost.

Buying here really can be pain or pleasure, so the only way to ensure (as much as you can) it's the later is to make the agents and notaire earn their fat fee. Make lists of what you wants left and what you don't (read what you'll pay for). Be clear and direct in what you want in the CdV, don't be afraid to include everything you want, and to build in clause suspensives to give you the option to walk away.

If the property has had work done ensure all the correct permissions are on file, and decinale for artisans is present if any work is less that 10 years old, work is warrantied for 10 years it's ultmately the sellers responsibility, if there is no artisanale decinale, the owners has to cover the liability. Also, if you have the details of the artisans who did the work, it can make it easier if you have future problems as they have worked on the property. Get a copy of the plan cadastral, and compare it to what's on google earth, and what you see on the ground, to ensure that the footprint of the property and the plan cadastral match. Verify access, and if it's shared and on what bases. Also establish exactly where the boundaries are, and if there is fencing which are your responsibility. Neighbour wars over fencing, hedges, and access etc are very common, especially when it's a Frenchy v foreigner

If the seller has owned the property for more that 16 years (IIRC) even as a maison secondaire, they may have no tax liabilities on sale, and you only pay tax on the heritable portion. So I would suggest when you agree a global figure (heritable and moveable), load as much of that global figure into the moveable as possible, within reason, it's a common practice, and reduces your fee's etc.

Lot's to take in and research to be done, and Carcassonne is beautiful.... good luck

17
Just two things to add to this thread. First, the structural inspection is really not a "thing" in France, and we struggled to find someone to do it. We eventually found a firm in Paris that would do it, but it cost a fortune and they were halfway across the country. In the end, we took our architect along to look at the property, but it was nothing like the inspections in the US/UK.

The second thing to point out, if it's helpful, is that the 8% notaire fees etc. can be put into the mortgage and financed, if you like. I was genuinely surprised by how little money I needed to put into the purchase -- from memory, I think it was about 10% including costs . We dealt with NextBank (part of Credit Agricole) and I've been very happy with them. PM me if you'd like the name of our contact there.

18
Back with an update. First, thank you so much to everyone who has posted here or reached out via PM. Your insights have been incredibly helpful. The learning curve is SO steep!

We found a place we liked, put in an offer, seller countered and we accepted. We have a signed offer with a breakdown of fixtures vs. moveable stuff. We've now received the draft Compromis. The notaire was recommended by the estate agent, but is not the same as the seller's notaire.

There are things we find concerning in the Compromis, but we're not sure whether this is something we can sort with the notaire or whether we should just hire a solicitor. Or if we should just run away.

Most concerning is that throughout the process we've been told the seller is Mrs Jane Smith (not her real name, of course). Yet now the Compromis lists a Mrs Jane Jones. In fact, Smith and Jones are each listed at various places in the document.

The second major issue is that the property description in the Compromis doesn't match the offer letter or the ad. The ad and offer say the house is X bedrooms and Y m2, but the Compromis says X-1 bedrooms and the m2 is 30% less.

There are other places where we don't think the wording is strong enough or puts us at a disadvantage. Does the notaire really have to answer all our questions as part of their regular fee, even if it takes a few hours?

19
Good luck with your purchase and many happy years enjoying it.

One time I worked in Basel for a chemical company and many English expats had bought in France and were happy.

When I read "The ad and offer say the house is X bedrooms and Y m2, but the Compromis says X-1 bedrooms and the m2 is 30% less." I would immediately withdraw my offer on the basis of fraud or false description until these discrepancies can be explained.

I would also demand the situation on "Smith and Jones are each listed at various places in the document" be explained before taking one step more.

My distant memories of Carcassonne from over 30 years ago are that it was a beautiful area but a lot of mosquitos in the summer. If you are also on a hilltop then mosquitos should not be a big problem.

20
It is almost Friday so I will share this irrelevant story.

I had a colleague who was driving through the Dordogne some thirty years ago and found a house he wanted to buy in a little village.

The owners told him he would have to get an agreement from the local priest.

It turned out the local priest was worried that most of the village had left and he would lose his job.

Eventually, my colleague bought the whole village for some stupid cheap price and wrote to the Vatican that it was essential that the priest continued to look after his flock which worked out OK for the priest.

This story did not have a happy ending, my colleague was on the way to visit his village some years later and had a fatal heart attack on the Autoroute before the medical services could get there and save him.