Taxes and fees for property owners in France
The initial purchase of a property in France will incur various fees and taxes.
There are no restrictions for buying a property in France by non-residents. However, foreign purchasers can face a few difficulties, often due to the redoubtable thoroughness of French bureaucracy. Expect to have to go through a fair bit of due diligence and be asked for your passport and birth certificate on a regular basis (taking multiple photocopies when you start the purchase process can save you time and effort later). Foreigners who need a visa to enter France or a carte de sejour to stay in the country may also be asked to show it.
Actually a French bank account is not required if you're buying a french holiday home, but it can make your life easier, not only during the purchase process but later on. Regular payments such as electricity bills and local taxes will be easier and cheaper if you have a French account. Most banks will require a French address to open an account, and some will have more specific rules (such as requiring customers to open their main bank account with the bank, which effectively rules out non-residents), so you may need to try several banks before you find the right one.
If you're transferring large amounts of money to France you may also find your bank asks for some documentation to assist with anti-money laundering regulations. For instance, if you have sold your existing property you may be asked to show a copy of the sale agreement, or you could be asked for bank statements from your main bank showing your income and savings.
When it comes to finance, non-French residents and even non-EU residents can get a mortgage to buy in France though the criteria may be stricter than for resident purchasers. They'll also have a choice of fewer banks and fewer mortgage products. However the fixed rate (that is a rule in France) will be the same - 2% of the property value that should be paid within the next 20 years (shorter term will result in lowered mortgage rate).
Purchasers generally will not need to deal with French taxes except for the taxe d'habitation and taxe foncière paid on the property unless they move to France full time. However, non-resident purchasers who have real estate assets in France worth more than EUR 1.3m will need to pay the wealth tax (Impôt sur la fortune immobilère).
|When shall I pay the deposit and the full price?|
|The deposit is payable when the compromis de vente is signed. It's normally 10%, but can be less; it's paid to the estate agent if the agency has financial guarantee insurance, otherwise to the notaire. If you cannot pay this amount at the moment of signing the initial contract, you will need to agree with the seller on another date. The full price needs to be in the notaire's account by the time the final contract is signed.|
One important factor that foreign purchasers need to bear in mind is that France has a particularly strict set of laws on inheritance, which will apply to their property in France. (EU citizens can choose to apply the law of their country of residence; non-EU citizens don't have that right.) French laws specify 'reserved' heirs - for instance, you can't disinherit your children - and have different rates of inheritance tax depending on the relationship of the heir to the deceased.
There are some ways round these issues, such as setting up a limited company to hold the property, or using a 'tontine' clause in the contract, with which a good notaire will be able to assist.