The subject areas below offer a guide to the process of buying an apartment in Paris or a house in France, and list many of the legal, tax and financial issues you may encounter when acquiring French real estate. Our consultation service provides independent advice, tips and warnings that will explain and demystify the acquisition process. Just France Sales also offers expert advice on maximizing revenue from the rental of your property.
Identifying the Right Property to Buy
- Market trends
- Initiating an efficient property search
- Working with a property search company or French real estate agency
- Understanding agency fees
- Accessing the private seller market
- Understanding square meters, loi Carrez and hectares
- Evaluating the fairness of the asking price
- Getting assurances the property is in sound condition
- Negotiating a price and formulating an offer
- Obtaining pre-approval for a mortgage to maximize leverage in price negotiation and/or reduce the French “wealth tax.”
Special Considerations for Paris Apartments
- Characteristics of the different arrondissements
- The effect on price of:
- Location
- Building style, floor, elevator and view
- A terrace, cellar storage space, service room, parking and gardien service.
- Building charges
- Clarifying a buyer’s obligation for scheduled building improvements.
The Buying Process
- The role of the notaire
- Selecting an English-speaking notaire
- Overview of a buyer’s rights and obligations
- Understanding the Compromis or Promesse de Vente (preliminary agreement of sale)
- Understanding analyses diagnostiques (diagnostic and energy efficiency tests on the property)
- Transferring the required deposit to the notaire
- Obtaining the best currency exchange rates
- Satisfying requirements of the “bank declaration”
- Granting a power of attorney to execute sales documents in absentia.
- Understanding the buyer’s right to rescind during the seven-day “cooling off period.”
Legal Issues
- Determining the appropriate form of ownership (individual, joint, corporate, etc.)
- Very important: Dealing with estate planning issues
- The pros and cons of fractional ownership.
Banking Issues
- Understanding a French bank account
- Selecting a bank
- Opening an account
- Regulations on moving money in and out of France.
Financing Issues
- Applying for a mortgage
- Obtaining pre-approval
- Credit requirements
- Selecting the best mortgage program (fixed, adjustable rate, etc.)
- Using the mortgage as a tool to avoid or reduce “wealth tax.”
Understanding Acquisition Costs
- Closing costs (notaire fees)
- Legal fees
- Mortgage costs, if applicable.
Understanding Post-Acquisition Costs
- Utilities, property insurance and ongoing maintenance costs
- Selecting telephone, cable TV and Wi-Fi providers
- Annual property taxes.
Understanding French taxes
- The “wealth tax”
- Annual property taxes
- Capital gains tax at sale.
Apartment Ownership
- Co-proprietor rights and obligations
- Annual co-proprietor meeting
- Assessments for building improvements.
Rental issues
- The Paris market
- Short-term vs. long-term rental
- How to organize the property to maximize rental revenue
- Marketing a French rental property to obtain the best clientele
- Tax on rental income.
Renovations
- Selection of architects and reliable contractors
- Interior decorating services.
Professional Assistance for non-French Owners
- Referral to accountants for filing of rental income returns
- Referral to lawyers specialized in French-American ownership and tax issues.
