Things to consider when buying French property

FEW people can resist stopping in front of an estate agent's window just to see what properties they have on their books.

Here regular contributor to the site, lawyer Guillaume Barlet, takes a look at some of the things you may need to consider if looking to buy a place in France.

In recent years, French laws relating to property ownership, inheritance and taxes have been subject to dramatic changes. Adaptation is key and these rules are full of traps for the unwary.

As in the UK, the French authorities are becoming increasingly conscious about health and safety issues.

French law also ensures that taxes due on the sale or purchase of a property, or on the death of an owner, are not avoided.

Laws often change and it is vital to take advice before embarking on any French property venture, since mistakes often cannot be rectified, or will cost you a substantial sum to put right.

Therefore, being prepared can be a real help, so below are examples of some traditional and more recent issues that may arise.

Swimming pool security
All properties should have had their swimming pools enclosed to the necessary standard at the latest since January 1, 2006.

If you are buying a property that does not comply, you need to arrange for a contract clause providing for the seller to provide a complying swimming pool.

Drainage systems and septic tanks
This issue has recently become an important element in the sale and purchase of a property as connection to the public system is now usually enforced by the local authorities incurring important costs for the new owner.

Where such connection is not possible, a septic tank is allowed as long as it is in good working condition.

Local authorities, communes, have an obligation to have checked such installations by December 31, 2012 to deliver a certificate proving the installation compliance with current regulations.

It is advisable to ask for such checks to be carried out before the compromis is signed as the survey may reveal defects which the new owner may be liable for at a later date.

This point is often overlooked at the compromis stage as it may depreciate the property. This stage being the most important during the purchase of a property it is paramount to secure this situation.

Surveys
Similar to the British HIPs, all properties being sold must now have surveys carried out.

Surveys cover elements such as termites, asbestos, lead, energy efficiency, carbon footprint measurements, natural and technological risks in the area and gas and electric installation.

All contracts should provide for this but you need to know how to interpret the reports and what to do if they reveal anything.

Depending on the situation of the property, it may be advisable to carry out additional types of surveys.

Taxes
In 2004, Capital Gains Tax in France was generally simplified and reduced, and for a non-French EU resident it is now levied at a rate of 16 per cent, down from 25 per cent. However there are still complicated rules relating to exemptions and reliefs.

It is important to bear in mind that a tax agent is not now needed if you sell your property for less than €150,000 or you have owned the property for more than 15 years.

Inheritance
Property in France is usually subject to French inheritance laws, regardless of whether you have a will or what is in your will. In most instances you cannot simply leave an entire property to your surviving spouse.

If either of two joint owners have children (including any by a previous relationship), those children can become entitled to a share in the property on the death of their parent.

It is vital to consider these problems before completing the purchase of a French property, to avoid expensive complications later.

Guillaume Barlet is a French lawyer specialising in French assets and wealth management issues for Bank House Investment Management Limited. Guillaume can be contacted by e-mail or by telephone on 01242 520074.

Comments

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