French
///Property
Transactions
Purchase (including ownership structure advice)
Whether you are buying a freehold property, or the French equivalent of a leasehold (copropriété), the legal process of purchasing a property in France is quite different from an English purchase, and you will be asked to sign key legal documents quite early in the process.
With the estate agent having a vested interest in the transaction completing, and the Notaire often not having the time or the level of legal English or understanding of the common concerns of an English buyer required to properly address any questions you may have, it can often feel that you have little control over the process.
Our tailor-made services mean that you can choose the level of advice which suits you the most:
- Consultancy basis: we agree a budget and you consult us during the process on specific issues that concern you.
- Contract review only: we will prepare for you a detailed report on the preliminary sale and purchase contract (compromis de vente or promesse de vente) and flag any areas of concerns, for you to then take up with the estate agent/Notaire.
- Full service: we will accompany you from the moment your offer is accepted and until the transaction completes, prepare a report on the preliminary contract as above but also liaise with the Notaire/estate agent as regards any changes that may be required and additional due diligence to be carried out, and then monitor the transaction until completion, ensuring that the Acte de Vente is as expected and dealing with any issues that may arise in the interim.
We can also advise you, either on a consultancy basis or as part of our full service, on the most appropriate ownership structure for your French purchase, such as the standard indivision, whether a tontine provision may be more suitable, or even more complex structures such as a French property holding company (SCI), or a démembrement de propriété (usufruit). And of course, on making a Will to cover your newly acquired French property.
Sale (including French capital gains tax)
A sale can often feel more straightforward than a purchase, however there are still many aspects of the transaction which can prove tricky, especially if you are confronted with a French buyer who is making requests of you that you are unsure whether they are reasonable or standard, or if you have carried out building work on the property over the years which are now being questioned.
Our tailor-made services mean that you can choose the level of advice which suits you the most:
- Consultancy basis: we agree a budget and you consult us during the process on specific issues that concern you.
- Contract review only: we will prepare for you a detailed report on the preliminary sale and purchase contract, highlighting all of the seller’s declarations, to ensure that they are accurate and that you are comfortable making them, and the mandatory guarantees that you must give your buyer under French law. You can then liaise directly with the Notaire/estate agent for any amendments.
- Full service: we will accompany you from the moment your offer is accepted and until the transaction completes, prepare a report on the preliminary contract as above but also liaise with the Notaire/estate agent as regards any changes that may be required, and then monitor the transaction until completion, ensuring that the Acte de Vente is as expected and dealing with any issues that may arise in the interim.
Pre-sale services: In addition to our consultancy basis, contract review and full service as detailed above, we can advise in connection to any sales mandate you are asked to sign. We also provide a pre-sale service where we assist you in putting together all the documents that will be required to provide once a buyer has been found, such as a copy of your Deeds, planning permission, building work invoices etc. In the event you have carried out building work without planning permission where it was required, or with planning permission but did not obtain sign-off, we can advise on the consequences of this and review your available options.
French capital gains tax: As part of our sale or pre-sale services, we can also advise in connection with French capital gains tax and more particularly on the following:
- Estimate of your potential French capital gains tax liability and explanation of how this is calculated
- Whether the building work you have had carried out can be offset from your gross gain and what documents will be required to achieve this
- Whether you will require the services of a French accredited tax representative, and how to obtain a certificate of affiliation to the English social security system from HMRC to obtain a reduced rate of taxation when it comes to French social charges
NB: if you are UK resident, your French sale may trigger a UK capital gains tax liability. We do not advise on this and you will need to obtain separate advice in this respect, including as to whether any double taxation relief is available, where relevant.
Divorce / Separation
Divorcing or separating is never an easy process, and it can be made even more complex when you own assets in France that must be taken into consideration. We would always recommend that advice is taken at the outset and before coming to any agreement as regards what should happen to the French assets, as very often a transfer in France as part of a divorce or separation is subject to a high taxation, and the timescales can be quite long.
We would be pleased to advise on the following:
Carrying out research with the French Land Registry or French Companies House to ascertain ownership of assets in the context of a financial disclosure
Advising in connection to French matrimonial regimes and marriage contracts
Advising on the options available to the couple as regards the transfer of French assets, including applicable taxes, costs and timescales
Advising on the wording of the Consent Order or Financial Remedy Order to ensure that they can be applied in France as expected
Instructing the relevant parties in France and oversee the transfer to completion
Société Civile Immobilière (SCI) – French property holding company
SCIs are a popular French property ownership structure, though very often come with an additional layer of complexity especially when the shareholders are based outside of France, due to the fact that the property is owned by a French-registered company, rather than outright.
If you own your French property through an SCI with other shareholders, you must comply with the SCI’s Statuts (Articles of incorporation) for any decision in connection with the SCI and its assets, including any transfer of shares, which can sometimes be very restricted or follow a strict procedure. Selling a property owned by an SCI can also be subject to additional requirements and taxes in France, especially if the SCI is to be liquidated and the sale proceeds distributed to the shareholders on completion of the sale.
We can advise on the following:
- Whether an SCI is the most appropriate structure to own your French property, and if not what other options are available, taking into consideration your specific objectives
- Setting up an SCI and transferring ownership of a French property to an SCI
- Transfer of shares between shareholders (either for consideration, or as a lifetime gift)
- Transfer of shares to a third party (either for consideration, or as a lifetime gift)
NB: if you are UK resident, the sale by the SCI of a property or the sale of your SCI shares may trigger a UK capital gains tax liability. We do not advise on this and you will need to obtain separate advice in this respect, including as to whether any double taxation relief is available, where relevant
Buy-outs between co-owners / forced sale of French property interest.
There may be cases where you own an interest in a property in France together with other parties, and wish to now exit. This can happen for example where you bought a property with friends, or inherited a property together with a parent/sibling. We would be able to advise on the following:
A buy-out by your co-owners (a licitation faisant cesser l’indivision where a single owner will remain, or a licitation ne faisant pas cesser l’indivision where the property will remain owned by more than one owner), including where the parties wish for the sale price to be paid to the exiting owner in sterling
Whether you can sell your interest to a third party
Your options on forcing a sale, if your co-owners do not wish to buy you out and a third-party sale is not possible.
NB: if you are UK resident, the disposal of your interest in a French property may trigger a UK capital gains tax liability. We do not advise on this and you will need to obtain separate advice in this respect, including as to whether any double taxation relief is available, where relevant
EXPERT LEGAL ADVICE
Our French Experts
Marc White
Solicitor, Notary Public & Accredited Mediator
Madeleine Carin
French Paralegal
Léa Maynard
French Lawyer & English Solicitor