French estate agents, taxes and other costs associated with a house for sale in France
So, you have your heart set on a particular house for sale in France. Be aware that buying French properties means taxes and other fees. Similarly, contracting the services of French estate agents and other professionals will add more expenditure to your purchase.
Initial costs of French properties
When you have an offer for a house for sale in France accepted either the agent immobilier (French estate agent) or notaire (notary) will prepare an initial contract for both parties to sign. At this stage the buyer pays a non-refundable 10% deposit, which is placed in a special account, and the property is removed from the market.
The final contract would be signed at the notaire´s office when the buyer will receive the deeds once the balance of the purchase price is paid.
French estate agents and other fees related to the sale of French properties
The seller should pay French estate agents commission, but this is sometimes built into the price of a house for sale in France. You should query this before signing anything.
An impartial notaire (acting on behalf of the state) is the only legal professional you are required to contract when buying a house for sale in France. Despite this, French estate agents are normally involved in the process. Other charges you must budget for are:
- Notary fees (3%)
- Registration fees (6%)
- Stamp duty (0.6% for property less than five years old. 4.8% otherwise
- Mortgage fee (1%). If applicable this is paid to the notaire
Agency fees and legal fees tend to be at a higher percentage for cheaper houses.
French properties and tax
French properties under five years old, and being sold for the first time, have TVA (French VAT) built into the price at 20.6%. This can be avoided through the leaseback scheme. By immediately leasing the property back to developers, who sub-let to holidaymakers, the buyer is exempt from TVA provided they own the property for 20 years. If you sell your house within that time then a proportion of the TVA must be repaid.
The seller is liable for capital gains tax at 33.3% but a specialist adviser will usually be able to reduce the amount of tax payable.
How currency affects the price of French properties
Currency issues are not something most people consider when they look at a house for sale in France. Fluctuations between the euro and other currencies can make French properties a good deal cheaper or more expensive in a short period of time.
So what is the real cost of a house for sale in France?
Lets say the asking price is 100,000. Firstly you have determined that the French estate agents commission will be paid by the seller and the house is over five years old:
Deposit - 10,000
Remainder of price - 90,000
Notary fees - 3,000
Registration fees - 6,000
Stamp duty - 4,800
Mortgage fee - 1,000
Total - 114,800
Taxes and legal fees can push the price of French properties up considerably. When looking at a house for sale in France it is vital to take French estate agents fees and other costs into account.
