Associações Profissionais de Imobiliário em France

Economic/Political Profile

For detailed information about the background, geography, people, government, economy, communications, transportation, military, and transnational issues of France,  click here

For the Index of Economic Freedom, click here

Financing a Property

There are restrictions on how much of the purchase of real estate a foreign national can finance in France. Citizens of the European Union can finance up to 85% of the total purchase price. Non-EU citizens can only finance up to 80% of the total purchase price. French citizens can finance 100% of the purchase price of the property in question. For additional information on financing property in France, click here

Buying a Property

There is no legislation restricting foreign investment in French property. However, the buyer must not be legally incapacitated in regard to the law applicable to the buyer’s home country. Once a property is purchased, the buyer s required to pay income tax, unless there is a tax agreement linking France to the country of the investor’s residence (this is very often the case). The first step that occurs in the real estate buying process in France is an oral agreement to make a purchase. The oral stage of the real estate buying process is informal and actually not legally binding. Once a buyer and seller agree on the final purchase price, a binding agreement is drawn up by the real estate agent which is known as the compromis de vente. The compromis de vente is a conditional or preliminary agreement to purchase. Generally, the compromise de vente sets for the steps which must be taken before a final contract can be entered into between the parties and before the ownership of the property will transfer from the seller to the buyer (E.g. the buyer will obtain financing while the seller will ensure that the title is free and clear and that the real estate can be transferred to the buyer without any encumbrances). When the compromis de vente is signed, the buyer typically makes a non refundable deposit in the amount of 10% of the total purchase price though there are limited instances in which the deposit is refundable, such as when clear title cannot be arranged within the agreed upon time period stated in the compromis de vente or the buyer cannot obtain financing in the time specified. This deposit is put into an escrow account, held by the notary or real estate agent until all of the requirements and obligations of the compromise de vente are completed.

Once searches have been conducted and everything is judged to be in order, both buyer and seller are called to the notary’s office. The notary reads aloud (in French) the final deed of sale, the acte de vente. Both parties, as well as the notary, sign this deed. If you have given your notary or the real estate agent power of attorney (par procuration), he can sign on your behalf. You pay the balance, receive the keys, and become owner of the property. The balance monies are required to be in place before final sale day.) The buyer receives a copy of the deed approximately six to eight weeks later once it has been recorded in the French administration system. The original document is kept at the notary’s office. Once the buyer has signed the final acte, he/she is responsible for the insurance of the buildings. This, by law, must include third-party liability insurance. He/she is also responsible for paying local and land taxes ( taxes d’habitation and taxes foncières). Taxes d’habitation are charged to the person occupying the property on Jan. 1. Taxes foncières are charged to the person who owned the property on that same date. (Owners of new properties are exempt from taxes foncières for the first two years.) Generally, the legal fees associated with most real estate sales range from 3 to 10% and are paid upon the completion of the sale – at the same time the balance due on the overall property sale is paid by the buyer. Legal fees include not only the notary’s fees (frais de notaire), but also disbursements, taxes, various duties, as well as searches at the land and mortgage registry. Real estate commissions paid to the real estate agents are freely negotiate but are typically in the range of 3-5% Negotiations between the parties determine what percentage of the commission will be paid by the buyer or seller or both. For detailed information and professional advice about buying a property in France, consult a member of ICREA’s member association, FNAIM. For a full roster of FNAIM members operating throughout France, search from our Find an Agent page. For additional resources on buying property in France, click here

Other Industry Sources

For additional industry and government resources, click below:

Central Bank of France

Official government site for investors in France