Since the new taxation reform was passed earlier this year, a
number of wealthy owners have moved out of France and put up their
properties for sale. This resulted in an exceptional price fall of
up to 15% for properties over €2 million, a first on the
market. Investing in French luxury real estate now could prove very
profitable; prices have rarely been so tight and negotiating has
become easier for investors. If acquiring property in France still
sounds hazardous to you, these eight pieces of advice should help
Make sure you are personally present when visiting properties
to acquire. It is essential not to take a decision from pictures or
other people's advice alone. Once your mind is made up, you
will no longer need to be present; a legal representative can
handle the whole acquisition process for you.
When considering an acquisition, ask for a second price
Arrange for complementary technical audits. A rather inclusive
series of technical audits is required by law but will be performed
by the seller's expert. It is worth the cost of having your own
expert double-check every point.
Never hand money out to the real estate agent or to the seller
before the sales agreement is signed. Real estate agents should be
paid upon reception of your new property's keys.
Notaries are mandatory for both the seller and the buyer. They
are responsible for ensuring the contract's lawfulness but are
not meant to defend the parties' interests; it is even possible
to share the same notary with the seller – although we do not
advise this. Notaries are experts in French real estate law but
would normally not be able to advise you in English on your own
French proceedings when acquiring property are thorough and
reliable. However they are quite different from other
countries' legislation, such as that of the UK or United
States. For instance, in some regions a sales agreement will compel
you to buy once signed - in others it will compel the sellers to
sell even if they change their mind. It is important to get advice
from an English-speaking counsel who knows your country's
legislation and who will be able to translate French proceedings
into your language and customs.
When undertaking renovation work, check your contractors'
lawfulness (such as adequate insurance coverage) and plan for
technical audits before and after.
Do not hesitate to seek assistance from a tax lawyer to
optimise your acquisition in anticipation of its future transfer;
although the much-publicised wealth tax does not apply to
properties (only to revenues), other taxes may apply when selling
secondary residence or inheriting property.
Acquiring a luxury property in France should not present any
particular difficulty if you follow these steps. If you wish to be
accompanied through each stage by an experienced professional, look
for a French real estate lawyer with an international background:
they would be able to arrange all of these securities for you.
Client Alert 2013-110
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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