Buying a Property in France

Buying a Property in FranceThe French government is very open to foreign investment into local real estate and there are hardly any obstacles to property purchases by foreigners. Citizens of the EU can buy property in France and hold the title directly in their name without any need to set up a French corporation.

The first document the buyer signs when acquiring residential property is a ‘reservation contract’, which is drawn up either by the realtor or by a French notary (all official paperwork is in French and Rellox can handle all translations and legal evaluations). The reservation contract itself is already a document with a strong legally binding impact on both the buyer and the seller. The buyer then transfers a deposit of 5 – 10% of the purchase price to a special account of the notary and the notary then prepares the paperwork required for the subsequent signing of a ‘purchase contract’.

The notary is also responsible for making sure the entire process is completed in accordance with the law and that there is no ambiguity with respect to the transfer of the title of ownership. The actual purchase contract is signed at the office of the notary (however, it is possible to issue a power-of-attorney to a third party who will then be signing the purchase contract on behalf of the buyer). The balance of the purchase price must then also be transferred into the notary’s account, along with any transfer taxes and fees. The one-time taxes, fees and other charges that are paid in addition to the purchase price are usually equal to approximately 7 – 8% of the purchase price. Real Estate Broker’s Commission: 3 % (+VAT).

In terms of ongoing (annual) taxes and fees, the owner and user of the property has to pay two different types of such taxes – a property tax (taxe fonciére) and an occupancy tax (taxe d´habitation). For an average-size apartment, this would be equal to several hundred euros per year (i.e. this won’t be thousands of euros per year).

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