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This buying guide has been designed to give you a general overview to purchasing and owning your own property in the French Alps and Lakeside regions of Annecy and Geneva.
It is meant to provide you with an insight into the steps you will take, as well as answer some of the questions you may have. It is not meant to as the definitive guide to purchasing French Ski Property but to assist you with some of the knowledge you will need.
The information provided details some of the extensive knowledge we have accumulated during work with Notaries for clients buying apartments, ski chalets and other property for sale in the French Alps.
We hope it assists you with your decision to purchase one of the many properties for sale in France we are marketing on behalf of the agencies, developers and constructors we work with.
The Buying Process
As in Switzerland, in France you require a Notary to process the sale. One Notary generally acts on behalf of the purchaser and seller. Should the purchaser however wish to use another notary this is also possible and the two notaries share the total fee between them.
The Compromis de Vente
Once the offer is accepted, the Notary will draw up the legal document "Compromis de Vente" and this is the agreement signed by the seller and buyer. For those residing in France this is normally done in the Notary’s office, while for those living outside of France, the contract is sent to them.
This document is valid for several months and is normally prepared and signed within 7 days of an offer being accepted. A deposit of approx 5 - 10% (depends on property) is made onto the notary’s client account at the same time.
The Compromis de Vente allows the Notary time to prepare the final documents of the sale and gather all of the relevant information pertaining to the sale. This typically takes around 3 months.
Clauses will be written into the contract to allow it to be invalidated and release the buyer and seller if certain conditions are not reached, such as failure of the buyer to attain the level of borrowing required.
Cooling Off Period
Under French Law, once the Buyer receives the signed Compromis de Vente (signed by both Buyer and Seller), there is a mandatory 10 day cooling off period, where the Buyer has the chance to withdraw should they wish.
This is the final contract signed by both the buyer and seller in front of the Notary. It is possible to sign a proxy either in France or in the country of residence, should you not be able to return easily. In the latter, buyers need to go to their local Notary (not Solicitor). All documents for UK buyers need to be validated by the Foreign Office in London.
At the point of signing the Acte Authentique, all relevant funds will need to have been paid onto the Notary’s Client Account and the Buyer becomes the registered owner of the property.
If the property of choice is new, the legal costs (a combination of Notary fees and taxes), typically amount to approximately 3% of the purchase price. In the case of resale French properties the fee is approximately 7%, but this can sometimes be reduced, where the seller wants to sell quickly.
It is sometimes worth purchasing a finished property in the name of a French Company that you set up known as an SCI, particularly if friends or two families are buying together. While there are no savings on purchase, the company is not liable to pay any annual Wealth Tax, minimises Inheritance Tax and allows you the ability to change ownership more easily.
However any usage of the property free of charge by the company members, or any rental income, must be declared in their personal tax returns. Similarly on selling the property, all Capital Gains must be declared on selling.
In the case of land purchase to build a chalet, this is better done as a personal sale vs a SCI to avoid VAT. Taxes are only levied on the plot and not the chalet to be built.
If you would like more information on setting up an SCI, we would be pleased to discuss this further with you when you visit. The information above merely acts as a basic guide to what you can look at when purchasing. We would be pleased to provide details of legal professionals to speak to in more detail that can advise you further on the merits / disadvantages of the SCI.
No commission is paid by the buyer. The agency commission is included in the sales price. The buyer is however responsible for paying the Notary fees, as described above.
We work with a number of UK and French Banks specialising in Mortgages for property purchase in France. We would be very pleased to provide you with a list of contacts to assist you in this process, once you have decided on the property you wish to purchase. 70% mortgages are now most common (subject to circumstances) with typical lending terms over 15 years.
Under French Law, French lenders are not allowed to offer mortgages where the purchaser’s repayments total more than 30% of their monthly income. This 30% must also include any existing mortgage you may have in your home country.
The details below are meant as a guide. Once you decide on the property you can discuss the payment structures specific to the property you wish to purchase.
These take the form of stage payments and are typically:
Note: some developer will have less stage payments and therefore higher % amounts at each stage
All new build construction in France must have a 10 year guarantee against defects, that is supported by an insurance policy to protect the purchaser should the constructor cease trading, thereby protecting the purchaser.
Working with several different currency brokers who have helped many clients over the years, we would be happy to make appropriate introductions should you wish. Please contact us for details.
Most importantly are the French inheritance laws which will relate to your new French home, even if you are a resident outside France. The fact that you may have a Will in your country of residence, will not necessarily mean that it is appropriate to be translated to relate to French Law.
Succession must be dealt with in France, as the laws are complicated and effectively prevent a parent disinheriting one or more of their children. Similarly if a French Will is not drawn up, the succession of the property to the surviving spouse may not be in its entirety, with portions been passed to children.
It is thus strongly advised, that those purchasing French property make a French Will to deal with your property. Any Will outside of France, should then exclude your property in France.
For those making a very expensive purchase it is worth speaking to legal representation about the purchase, to minimise the effects of French Inheritance, thereby ensuring the property passes to directly to the surviving spouse.
Capital Gains Tax
This is the difference between purchase price (plus any renovation work completed) and the sale price. The gain is then taxable at a set rate of 16% for European’s (extra 10% Social tax for French Residents) or flat 33% for non Europeans. The new rules state renovation work, is that completed by a French artisan having produced an invoice for the work.
There are however deductions based on how long you have owned the property. There is no deduction for the first 5 years of ownership but every year from then on allows you to deduct 10% off your Capital Gain.
Currently properties owned for more than 30 years are free of Capital Gains Tax but you will still be liable for tax in the UK, this will be reduced down to 22 years from September 2013
Local rental agencies can be found in all major resorts in the French Alps, providing full rental and management services. There are two forms of rental options, touristic (weekly) and long term lets. In the former, this is the most popular form of renting, where owners use the property for themselves a few weeks a year, while the latter is certainly an option in those resorts which are open all year round such as Morzine.
For best rental returns you need to consider the resort and location. In the higher resorts such as La Plagne, Les Arc’s and Val d’Isere, there is a good winter rental return thanks to the long winter season. However these resorts tend to be single season and have little or no summer rental potential.
Resorts such as Morzine, Les Gets and Megeve all have dual season potential and therefore offer a summer return as well. For best rental returns apartments and chalets should be well located in the resort, close to the lifts, restaurants and shops.
We would be happy to advise you on rental potential of the properties you might be interested in, but we do recommend clients who plan to rent the property they are purchasing, talk directly with the local agencies to get an accurate idea of what occupancy and returns they can expect, as well as what the charges are.
One option of ensuring a rental return (often guaranteed) is the Leaseback Property scheme run in France, where owners lease their apartment or chalet back to the developer, having a set number of weeks where they can use it themselves. Read our detailed guide about French Leaseback Property.
By leasing back the property for more than 9 years, it is also possible to reclaim the VAT of 19.6% from the French Government. Some developers will deduct this from the advertised sale price automatically.
All rental income in France is subject to tax and must be declared to the French Tax office by 30th April each year. For amounts under 75,000 Euro’s per annum, the owner can simply pay tax on 30% of the gross income.
For more information on this subject, we would be happy to make an introduction to one of the tax advisors we work with as part of your purchase procedure.
Running Costs and Taxes
The two local property taxes in France are "taxe fonciere" (exempt for the first 2 years in a new build) and "taxe d’habitation".
In the case of re-sale properties these figures are readily available and can be obtained for you when you decide on the property you wish to purchase.
It is very difficult to calculate and provide an estimated general figure for the annual service charges as this depends on the size of the apartment/chalet as well as extraneous costs such as lift, shared swimming pool, caretaker and need for a grounds man (snow clearing / grass cutting).
We would be happy to provide an estimate of these costs on the property you choose, to assist you with the decision making process.
It is not a legal requirement to carry out a survey. However, the seller has to provide the buyer with asbestos, termite and lead Certificates and certified area measurements, according to the type of property and area in France.
Should you wish a survey to be carried out for the peace of mind of your purchase, we do know professionals that will do this for you at a cost and you can discuss this further once you have found the property you wish to buy.
If you are resident in France, then all of your worldwide assets will be taken into consideration for the purposes of calculating tax.
However non-residents are only assessed on the net value of any assets held in France, so if a property in France is purchased through a mortgage, then this can be deducted from the value of the assets, before calcuating the tax owed. In addition, if the property is owned by two families, related or otherwise, then the value is essentially reduced by half.
Wealth Tax is complicated and we would be happy to put you in touch with someone who specialises in this field.
To help you during the process of purchasing ski property or land in France we have produced a simple glossary below for your use.
le compromis de vente
contract for sale of land or property
housing-estate. Often only a few houses
solicitor-for conveyancing, wills, financial advice
apartment or flat
an apartment or maisonette on two floors
une maison jumelle
semi detatched house
une maison mitoyenne
semi detatched house
plot of land
one bedroom apartment or bedsit
la vente en l'état de futur d'achèvement
sale of property before it is built
une agence immobilière
en bon état
in good condition
la chambre à coucher
le chauffage collectif
shared heating(in an apartment block)
chimney or fireplace
le premier étage
le rez de chaussée
la salle de bains
la salle à manger
la salle de séjour/le séjour
sitting room/lounge/drawing room
la salle d'eau
lift or elevator
les charges (comprises)
services charges (included)
block of flats
Electricite de France-Gaz de France
relevé d'identité bancaire (le RIB)
bank account details
la taxe d'habitation
local tax on occupation of the property
la taxe foncière
local tax on ownership of property
2 bedroomed appartment
3e ét / troisième étage
appt / appartment
cuis éq-cuisine équipée
gge / garage
grd séj / grand séjour
large living room
rdc / rez de chausée
SàM / salle à manger
SdB / salle de bain
séj / le séjour
s/sol / sous sol
sur 2 niv / sur deux niveaux
on two levels
Please note these details have been prepared as a guide only. We recommend you take further advice with the Notary handling your purchase, Accountant, Tax Specialist or Rental Agency on anything you wish clarified before signing any contract of sale as we cannot be held legally responsible.
For more information on our properties for sale in the Portes du Soleil (including Avoriaz, Morzine, Les Gets, Chatel, La Chapelle de Abondance, Montriond & St Jean d’Aulps ), Essert Romand, La Grand Bornard, Val d’Isere, Megeve, Evian, Annecy, La Plagne, Les Arcs, Chamonix, La Tania, St Gervais, Sainte Foy, Tignes, Thonon Les Bains and much more, please visit our properties for sale.
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