FAQs relating to property on the French Riviera
Do I have any annual property taxes to pay on my French Riviera property?
What is a Notaire?
Do I need home insurance?
What if I change my mind about the property?
What other fees are involved in the purchase of French property?
Is there an agency commission and how do French estate agents work?
How do I set up utilities, a bank account & pay bills?
How do I fund my purchase in France?
Can I make an offer on a property?
Do I need a survey?
There are two local taxes which are both based on the property's theoretical rental value. The Taxe d'Habitation (Occupancy tax) is paid by the person living in the property as of the 1st of January of every year, so if you rent your property out long-term, this is paid by the tenant. However if the property is empty or rented out on a seasonal basis then you as the owner will have to pay this tax. There are exemptions for over 60s and also if the property is not habitable due to requiring extensive renovation.
The other tax is the Taxe Fonciere which is also based on the notional rental value - the cadastral value - which is assessed by the local authority on the 1st of January each year. New Build properties can benefit from a reduction or exemption from this tax, as can properties which have been substantially renovated. You will be charged on a yearly basis for this tax which is generally very affordable; for example you can expect to pay around 650€ per annum for a one bedroom flat in Cannes centre. For further information see the chapter on 'The French Taxes and Costs' section under Buying in France.
Unlike most European Solicitors/Lawyers a Notaire is not appointed to act for either party in the transaction but as a public official whose duty is to the State. Their function is to ensure that the transaction is carried out legally and accurately and in accordance with the proper processes and to give the transaction absolute validity that cannot be contested. It is therefore unnecessary to appoint a second Notaire to act on your behalf and indeed having two Notaires involved can often hold up the process. You may however feel more at ease having your own Notaire to advise you and this will not cost you any more money ? both Notaires will share their fees. Attika has contacts with an excellent selection of English-speaking Notaires.
Do I need home insurance? You need to have your property insured from the day you come into ownership of it (or in the case of new builds, from the day the building is completed.) . Most Notaires will ask for proof of insurance before completion. Contact us and we will be happy to organise insurance for you and in most cases, this will cover you also if you rent the property out short term.
It is extremely important that you are happy with your property purchase and do not sign any paperwork unless you are certain about it. Once you sign a 'compromis de vente' (the preliminary contract) and had it countersigned by the vendor, a French law called the 'Loi SRU' entitles you to withdraw from the sale within 7 days following the day you receive the signed contract at your home where it will be sent by registered letter. This effectively means that you probably have about 10 or 11 days in reality from signing the paperwork in France as it will generally take at least 3 days for the documents to get to the UK and your seven days begin the day after the documents are delivered. If you change your mind during this time you can withdraw from the sale with no penalty you will just have to inform the estate agent or vendor by means of a signed and dated notification that they should receive within the seven day period. If you have paid your deposit it will be refunded in full, by the Notaire, within a maximum time limit of 21 days. After the 7 day cooling off period has elpased the contract becomes binding, and if all of the conditions precedent in the contract are met then you cannot withdarw from the sale/purchase without having to pay a penalty fee to the seller (generally around 10% of the net price and this should be stated in the 'compromis de vente'). You can also be forced to go ahead with the sale by French law, which can take up to two years.
The seller does not have the same privilege as the buyer in terms of the seven day cooling off period and unless the you breach the contract, he or she cannot withdraw from the sale at any time without paying you the penalty fee.
The only other circumstance in which you can withdraw from the sale without a penalty is if you have made the contract subject to obtaining finance and you fail to obtain finance from a French bank or if there is a breach of contract and one of the suspensive clauses inserted into the compromis is not met.
Please note that the seven day law does not apply to purchases of land or purchases of property by professional purchasers (registered developers or SCIs).
You need to budget for up to 7% in legal and alos around 1-1.5% for mortgage fees to be added on to the sale price of a property over 5 years old (the rate is significantly reduced for New Builds to around 2.5% and also around 1.5% for mortgage fees). The legal fees cover Land Registry Tax, Commune taxes, Notaire's fees, Stamp duty and various Disbursements. All agents' fees are noramlly already included in the price as is VAT unless otherwise stated.
On the day of the final signing, when the property officially becomes yours, you may also have to pay a pro-rata contribution to the previous owner towards the land tax (taxe fonciere) which is calculated from January 1st each year (so if you sign for the property in June, you will refund the previous owner 6 months' worth of property tax). Unless you speak excellent French you may also have to pay a small amount for an official translator to be present at the signing. Should you purchase an apartment or villa in a 'co-propriete' you may also have to contribute towards the sinking fund (or contingency fund), if this is the case you will be informed in advance and it is generally a low amount (to cover repairs in communal areas etc). See further information under our chapter entitled The Buying Process'.
Unlike in the UK and many other countries, France has a system of multiple listings for property sales and it is rare for a vendor to give a contract to just one agency. When a seller gives an agency permission to market their property.
Estate agencies in France are free to decide upon the amount of commission that they charge. The commission chargeable must be on display at the agencies office. As a rule of thum, most agencies will charge the following:
Property 200 000€ - Commission between 8-10% of selling price
Property 200 000€ - commission is around 6% of the selling price
Property 2 000 000€ - commission around 5% of selling price
Generally speaking the price of the property that an agent presents to you will include the agencies commission and in most cases the commisison is payable by the seller. However, it can also be the buyer that pays the commission and if this is the case then the agent will ask you to sign a search mandate or a 'mandat de recherche'
The advantage of the buyer paying the agency commission:
The buyer will pay slightly less Notary fees since the notary fees will be based upon the net selling price i.e. the total selling price minus the agency commission. So for example say you are buying a property for 550 000€, the agency commission is 50 000€ and is included in the asking price. The Notary fees which are around 7.5% will be calculated on 500 000€ as opposed to 550 000€ so you will be making a svaing of 3750€
The disadvantage of the buyer paying the commission:
If you are taking out a loan on the property, it can be the case that the bank will not loan on the agency commisson if it is stipulated in the contract that the buyer will be paying the commission. In terms of capital gains tax, the tax base will be calculated on the difference between the gain and the net price paid i.e. the asking price minus the agency commission, as opposed to the total selling price which would be the case if the seller pays the agency commission. So should you wish to sell your property within 15 years of you purchasing it, your capital gains tax will be more than if seller pays the agency commission. For information on Capital Gains Tax, please see the below chapter on French Taxes & Costs
On top of the price of the property presented to you the only other significant costs you have to factor in to the prices seen on our site are the legal fees payable to the notary and mortgage set-up fees where appropriate.
France's multiple listings system allows maximum exposure for a property and it is not uncommon to find the same property on the books of 20 different agents - and often at different prices!! This can be a tiresome and disheartening process if you're wasting valuable time visiting previously viewed properties as most agencies will not give you the exact address of the property before taking you to visit. The best solution is to appoint one single agency to act on your behalf who will undertake a full and comprehensive property search allowing you to visit suitable properties on the market offered at the best price.
Attika International's personalised property search will source properties and coordinate an itinerary of visits for you. It couldn't be simpler, all you have to do it is turn up and enjoy the fun part of finding your dream home!!
When you come over for your viewing trip, we recommend that you set up a bank account at the same time. Ensure that you have your passport and proof of UK address with you and we will recommend the nearest English speaking bank.
If you purchase your property via Attike, we will set up direct debits ('prelvement bancaire') for your gas, electric, water, telephone and syndicate charges upon completion of the purchase. Otherwise you need to send your bank details to the appropriate company and request payment via direct debit. Invoices can be sent to your UK address if you wish.
Setting up direct debits in France is simple. Once you have a bank account you simply need to supply a RIB (this is simply a slip of paper with your bank account details on it) to the local French Electricity and Gas Board or appropriate company and they will debit the money from your account every month.
You should ask your Notaire to make sure that your tax bills, such as your Tax Fonciere & Tax habitation, as well as your 'Syndic' charges are posted to your home address in the UK.
How do I fund my purchase on the French Riviera? Unless you are a cash buyer you will need to find a way to fund your French apartment or villa. Many people choose to release equity from their UK property but you should also consider obtaining a French mortgage.
Mortgage rates in France are lower than in the UK and finance is generally easy to obtain if you have adequate income. As a non-resident, you can usually borrow up to 80-85% of the property price so you will need to provide at least the remaining 15% yourself. Depending on the bank you may or may not have to fund the Notaire’s fees yourself as well.
If you do decide to take out a mortgage to pay for your French home then you generally have 30 days from the date of signing the preliminary contract (usually a compromis de vente) to obtain your loan. It would therefore be advisable to start arranging an agreement in principle before you begin your property search in order to be certain of how much you can borrow. If you are unable to obtain a loan from a French bank then your contract becomes null and void and you are refunded your 10% deposit. Please note that if you obtain your mortgage from a non-French bank this law (the Loi Scrivener) does not necessarily apply.
French mortgages are not based on the UK model of income multiples. Instead, French banks apply fairly strict affordability criteria to assess how much they would be willing to lend you. As a general summary, your monthly French mortgage payment plus any UK mortgage or rent plus any other long-term borrowings (car loans etc) should not exceed a third of the buyer’s gross (joint) monthly income. As an example, Mr. and Mrs. Smith’s UK mortgage is £500 per month plus they have a UK car loan of £100 per month and the proposed French borrowing is £200 per month which totals major outgoings of £800 per month. Therefore their gross joint income needs to be at least £2,400 (the outgoings of £800x3) per month in order for the French bank to agree to their mortgage.
We strongly advise you supply the following documents to a French bank BEFORE you start visiting properties in order to obtain an agreement:
Can I make an offer on a property? Yes you can make an offer on a resale property although it may not be accepted, especially if the property has not been on the market for long and if the owner is not desperate to sell ! Property is in short supply on the Riviera and there are far more buyers than properties. As in any other country if a property is well-located, attractive and fairly-priced it will be snapped up very quickly - so if you see your perfect villa or apartment then you may lose it if you make an offer as someone else will without a doubt be right behind you willing to pay the full price. However, depending on the circumstances you may find that an offer of 3-4% or so below the asking price will be accepted especially if the property is situated outside the city centres and/or is in need of work.
You cannot however make offers on new build properties. If you are buying up several properties within one development it may be worth trying to get a discount though or ask for some extras to be included.
Do I need a survey? Surveys by professional surveyors or 'experts' are unusual in France. It is more usual to request local artisans to give an opinion as to the condition of the roof or the structure for example and for them to give quotations for any necessary work. There are however a number of UK-qualified surveyors on the Côte d’Azur and we will be happy to put you in touch with them. You cannot make a purchase subject to survey as such, but you can make it subject to specific items that you wish to have checked (eg that the roof is safe, that planning permission for annexes was obtained etc).