As a member of the EU, there are no restrictions on fellow EU member citizens (including Britons) buying a property in France. All properties in France are owned freehold. The purchase process varies according to whether you are buying an existing (resale) or a new build property. On resale properties, having chosen a property to buy, you and the vendor sign a Compromis de Vente, which is a legally binding document detailing the price, agency fees, statutory reports (lead, asbestos and termites reports, where applicable) and your mortgage requirements. The property is then taken off the market and the agreed price is fixed. At this stage, you will pay a deposit of usually 10% to an escrow account set up by the Notaire. Once the Compromis is signed, there is a seven day cooling off period. You can cancel the purchase during this period and your deposit will be refunded. Completion of the purchase takes about three months, during which time the Notaire conducts searches and draws up the Acte Authentique (final deed). On the day of completion, both you and the vendor attend the Notaire’s office to sign the Acte de Vente (sales deed). Alternatively, you can arrange a Power of Attorney and have the balance of the funds transferred beforehand. The property is officially yours when the deed has been signed.
With a new build property purchase, once you have selected the property to purchase an option is taken for you for up to 48 or 72 hours. During that time, you will sign a reservation contract which lists the property price, layout, delivery date, payment terms and whether you need a mortgage. The property is then taken off the market and the price cannot be changed. At this stage, you also pay a deposit, usually 5%, to an escrow account set up by the Notaire, who is the French notary overseeing the purchase process. Once the reservation contract is countersigned, there is a statutory seven day cooling off period. You can cancel the purchase during that period and your deposit will be refunded. Completion of the purchase takes a further three to four months. During that time the Notaire draws up the Acte de Vente. On the day of completion, you can attend the Notaire’s office to sign the final contract, although you are entitle to arrange a power of attorney instead, when someone (your lawyer) will sign on your behalf. The property is officially yours when the final deed has been signed, even though construction may not have started yet. As ever you should engage your own solicitor. See www.lawsociety.org.uk for a list of English speaking solicitors based in France.
Budget 8 to 12% for all purchase costs and fees. Based on a £100,000 property you should expect to pay the following:
Registration fees: £5,000
Notary fees: £1,000 (+19.6% VAT)
Registration fees: £300-£1,000
Agent’s fees: £2,000-5,000 (+19.6% VAT) n.b. not usually paid ona new build property purchase
TOTAL: £8,300-£12,000
Capital gains tax is 16% in France, whether you are resident or non-resident. If you are a non-resident, however, you will be liable to pay tax in the UK on your worldwide income (including the profit made on the sale of the French property). You will not pay twice because Britain and France has a double taxation treaty; you will simply the balance in the UK, having first paid in France what is due
Overseas mortgage company Conti provides non-residents with maximum 100% LTV mortgages, over a maximum term of 30 years. The minimum loan is £47,000, and repayment and interest only mortgages are available.
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Amanda Lamb is on her travels finding you the ideal location for your new house
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