Monday, 26 October 2015

Monday, 26 October 2015

Buying French Property: Costs and Taxes

It is important to be prepared for the various costs that will be incurred throughout the French property buying process.

Deposit: When you sign the Compromis de Vente (the preliminary sales agreement contract) you will pay either 5 or 10% of the purchase price. The deposit is normally held by the notaire until completion.

Notaire fees: The cost of legal fees, stamp duty and taxes on an existing property are generally around 6.5 - 8 % of the purchase price, (plus 0.5% of the amount borrowed for registering the mortgage). Notaire fees are calculated on a scale set by the Government, so they will all be on the same basis, so you cannot “shop around”, for a better deal. You do have the freedom to choose your own notaire, and having 2 notaires involved incurs no extra costs.

Agency fees: Estate agency fees are usually around 5-7% and built into the sales price. Scales do vary quite considerably, and Allez-Français always has competitive fees. There is always a debate about who actually fees (buyer or vendor), but effectively they are paid by the vendor from the proceeds of the sale or global figure paid by the buyer, which includes the Notaire fees.

There are two taxes principal on all residential property in France: the Taxe Foncière (a land tax) and the Taxe Habitation (a local tax). The precise amounts often vary greatly, so check with your agent, and are influenced / depend upon location. I always tell potential buyers that they will not be put off a property by the size of the local taxes. (In other words, if you have to ask how much they are, you can’t afford the house).
image © pgaborphotos

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