For sale, Gers: fully renovated country property 320,000 Euros
http://www.compass-immo.com/view.php/764?from=new
mardi 6 juillet 2010
jeudi 10 juin 2010
BELLE PROPRIETE DE 40 HA AVEC INSTALLATIONS EQUESTRES
BELLE PROPRIETE DE 40 HA AVEC INSTALLATIONS EQUESTRES
EUR 860'000 | RÉF. 2033-XML
Au sud de Toulouse, belle propriété de 40 ha comprenant une partie cultivable ainsi qu'une grande forêt idéale pour balades équestres. La demeure d'env. 500 m² habitables, soit 10 pièces dont 7 chambres toutes très spacieuses, est une ferme typiquement Toulousaine avec une remise de 200 m². Cette propriété comprend aussi 30 boxes, 1 rond de longe, 1 manège et une carrière. Vue dégagée sur la campagne. Véritable coup de coeur pour ce havre de paix qui fera le bonheur des amoureux de la nature et/ou des chevaux.
L'habitation comprend:
Un salon (60 m²) avec grande baie vitrée donnant sur le jardin, une salle à manger (20 m²) avec cheminée, une cuisine américaine (15 m²), une chambre parentale (70 m²) avec douche à l'italienne, 2 vasques et dressing, un salon (30 m²), 4 chambres (30 m² chacune) dont 2 avec coin douche à l'italienne, vasque et placard, 2 autres chambres (13 m² et 14 m²) et une salle de bains (15 m²).
Espaces extérieurs et dépendances:
Environ 40 ha de terres dont une partie cultivable et une grande forêt
Remise de 200 m²
30 boxes à chevaux
1 rond de longe, 1 manège et 1 carrière
Jardin et piscine
Autres éléments:
Chauffage central au fioul
Informations sommaires:
Secteur TOULOUSE, Haute Garonne
Etat Habitable
Chambres 7
Pièces 10
Surface habitable 500 m2
Terrain 410'000 m2
Taxe foncière N.C.
Prix EUR 860'000 (F.A.I.) + frais de notaire
Réf. no. 2033-XML
EUR 860'000 | RÉF. 2033-XML
Au sud de Toulouse, belle propriété de 40 ha comprenant une partie cultivable ainsi qu'une grande forêt idéale pour balades équestres. La demeure d'env. 500 m² habitables, soit 10 pièces dont 7 chambres toutes très spacieuses, est une ferme typiquement Toulousaine avec une remise de 200 m². Cette propriété comprend aussi 30 boxes, 1 rond de longe, 1 manège et une carrière. Vue dégagée sur la campagne. Véritable coup de coeur pour ce havre de paix qui fera le bonheur des amoureux de la nature et/ou des chevaux.
L'habitation comprend:
Un salon (60 m²) avec grande baie vitrée donnant sur le jardin, une salle à manger (20 m²) avec cheminée, une cuisine américaine (15 m²), une chambre parentale (70 m²) avec douche à l'italienne, 2 vasques et dressing, un salon (30 m²), 4 chambres (30 m² chacune) dont 2 avec coin douche à l'italienne, vasque et placard, 2 autres chambres (13 m² et 14 m²) et une salle de bains (15 m²).
Espaces extérieurs et dépendances:
Environ 40 ha de terres dont une partie cultivable et une grande forêt
Remise de 200 m²
30 boxes à chevaux
1 rond de longe, 1 manège et 1 carrière
Jardin et piscine
Autres éléments:
Chauffage central au fioul
Informations sommaires:
Secteur TOULOUSE, Haute Garonne
Etat Habitable
Chambres 7
Pièces 10
Surface habitable 500 m2
Terrain 410'000 m2
Taxe foncière N.C.
Prix EUR 860'000 (F.A.I.) + frais de notaire
Réf. no. 2033-XML
LARGE FARMHOUSE ON 100 ACRES WITH EQUESTRIAN FACILITIES
LARGE FARMHOUSE ON 100 ACRES WITH EQUESTRIAN FACILITIES
EUR 860'000 | REF. 2033-XML
Located South of Toulouse, substantial property of some 100 acres comprising agricultural land and woods ideal for hacking. The dwelling, which consists of a large 7 bedroom farmhouse, typical of the Toulouse area, with 3 reception rooms, has a total habitable surface area of approx. 500 m². There is an outbuilding of ~ 200 m², as well as 30 loose boxes, a lunging ring and 2 sand schools, one of which is covered. Views onto open countryside. Peaceful setting.
The dwelling comprises:
A reception room (60 m²) with large window façing the garden, a dining room (20 m²) with fireplace, a kitchen (15 m²), master bedroom (70 m²) with shower, 2 wash basins and dressing room, a sitting room (30 m²), 4 bedrooms (30 m² each) two of which have en-suite facilities and built-in wardrobes, 2 further bedrooms (13 m² and 14 m²) and a bathroom (15 m²).
Outdoor space and outbuildings:
Approx. 100 acres including farmland and a large wood
Outbuilding (200 m²)
30 loose boxes
1 lunging ring and 2 sand schools (one covered)
Garden and pool
Other features:
Oil fired central heating
Summary information:
Area TOULOUSE, Haute Garonne
Condition Habitable
Bedrooms 7
Rooms 10
Habitable surface area 500 m2
Amount of land 410'000 m2
Land tax T.B.A.
Price EUR 860'000 (F.A.I.) + notaire's fees
Reference 2033-XML
EUR 860'000 | REF. 2033-XML
Located South of Toulouse, substantial property of some 100 acres comprising agricultural land and woods ideal for hacking. The dwelling, which consists of a large 7 bedroom farmhouse, typical of the Toulouse area, with 3 reception rooms, has a total habitable surface area of approx. 500 m². There is an outbuilding of ~ 200 m², as well as 30 loose boxes, a lunging ring and 2 sand schools, one of which is covered. Views onto open countryside. Peaceful setting.
The dwelling comprises:
A reception room (60 m²) with large window façing the garden, a dining room (20 m²) with fireplace, a kitchen (15 m²), master bedroom (70 m²) with shower, 2 wash basins and dressing room, a sitting room (30 m²), 4 bedrooms (30 m² each) two of which have en-suite facilities and built-in wardrobes, 2 further bedrooms (13 m² and 14 m²) and a bathroom (15 m²).
Outdoor space and outbuildings:
Approx. 100 acres including farmland and a large wood
Outbuilding (200 m²)
30 loose boxes
1 lunging ring and 2 sand schools (one covered)
Garden and pool
Other features:
Oil fired central heating
Summary information:
Area TOULOUSE, Haute Garonne
Condition Habitable
Bedrooms 7
Rooms 10
Habitable surface area 500 m2
Amount of land 410'000 m2
Land tax T.B.A.
Price EUR 860'000 (F.A.I.) + notaire's fees
Reference 2033-XML
samedi 17 avril 2010
COMPASS IMMOBILIER: Purchase of off-plan property
PURCHASE OF PROPERTY TO BE OR THAT IS BEING CONSTRUCTED
OR IS THE OBJECT OF MAJOR RENOVATION
This differs from the purchase of re-sale property in terms of the regulatory framework and the procedure. The main differences are summarised hereafter:
• Instead of a compromis or sous-seing privé, a contract known as a ‘contrat préliminaire’ or ‘contrat de réservation’ is drawn up between the parties.
• The deposit is a maximum 5% of the purchase price if completion of the sale is envisaged within one year. Only 2% can be requested if completion is to be within two years and no deposit is payable beyond this period.
• Payment of the purchase price is made in stages in accordance with the point which the construction has reached. No more than 35% can be required before the foundations are completed. The final 5% of the price is always to be paid upon the hand-over of the completed property.
• An acte authentique is signed to transfer the ownership and this is usually finalised whilst the actual construction is in the early stages (at the earliest when the foundations are laid). A draft copy must be provided to the purchaser who has a period of one month in which to study it. He or she also has the right to consult the various documents relating to planning permission etc. The vendor is under a contractual obligation to deliver the finished product within a determined deadline.
• The property will be subject to warranties and obligatory insurance policies in relation to quality of workmanship, hidden and apparent defects, damage caused by the building work… A financial guarantee provided by a bank or financial institution to fund the costs of completing the construction or compensation of the purchaser in the event that the developer cannot finish the project must also be provided for most new constructions.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
OR IS THE OBJECT OF MAJOR RENOVATION
This differs from the purchase of re-sale property in terms of the regulatory framework and the procedure. The main differences are summarised hereafter:
• Instead of a compromis or sous-seing privé, a contract known as a ‘contrat préliminaire’ or ‘contrat de réservation’ is drawn up between the parties.
• The deposit is a maximum 5% of the purchase price if completion of the sale is envisaged within one year. Only 2% can be requested if completion is to be within two years and no deposit is payable beyond this period.
• Payment of the purchase price is made in stages in accordance with the point which the construction has reached. No more than 35% can be required before the foundations are completed. The final 5% of the price is always to be paid upon the hand-over of the completed property.
• An acte authentique is signed to transfer the ownership and this is usually finalised whilst the actual construction is in the early stages (at the earliest when the foundations are laid). A draft copy must be provided to the purchaser who has a period of one month in which to study it. He or she also has the right to consult the various documents relating to planning permission etc. The vendor is under a contractual obligation to deliver the finished product within a determined deadline.
• The property will be subject to warranties and obligatory insurance policies in relation to quality of workmanship, hidden and apparent defects, damage caused by the building work… A financial guarantee provided by a bank or financial institution to fund the costs of completing the construction or compensation of the purchaser in the event that the developer cannot finish the project must also be provided for most new constructions.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
mercredi 7 avril 2010
COMPASS IMMOBILIER: Ad hoc issues - Land Divisions and Marking of Boundaries
LAND DIVISIONS AND MARKING OF BOUNDARIES
In certain cases, plots of land have to be divided as a result of the sale. This is typically the case where a vendor is selling part of his land but retaining the rest. An expert surveyor (géomètre) will be responsible for the land division (arpentage). He or she will mark out the new boundary of the plots (bornage) and replicate this on the land registry plan (plan cadastral). Modern boundary stones usually consist of red plastic discs mounted on V-shaped bases stuck into the ground. The acte authentique will detail what has occurred and the new plot numbers for the property purchased will be given. If a land division and/or marking of boundaries is to be undertaken, it should be made clear whether payment is to be exclusively at the charge of the vendor or purchaser, or shared between both parties.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
In certain cases, plots of land have to be divided as a result of the sale. This is typically the case where a vendor is selling part of his land but retaining the rest. An expert surveyor (géomètre) will be responsible for the land division (arpentage). He or she will mark out the new boundary of the plots (bornage) and replicate this on the land registry plan (plan cadastral). Modern boundary stones usually consist of red plastic discs mounted on V-shaped bases stuck into the ground. The acte authentique will detail what has occurred and the new plot numbers for the property purchased will be given. If a land division and/or marking of boundaries is to be undertaken, it should be made clear whether payment is to be exclusively at the charge of the vendor or purchaser, or shared between both parties.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
vendredi 2 avril 2010
COMPASS IMMOBILIER: Ad hoc issues - Insurance
AD HOC ISSUES
INSURANCE
An occupier’s liability insurance is highly advisable in France and is usually a condition of any mortgage (the cover note, attestation, will usually be required by the bank at completion). You will be responsible for insuring the property from the day of completion. In certain cases it is possible to take over the existing policy but it is often best to have this organised for completion so that you can ensure that you have the policy best suited to you, the value of your contents etc. It is perfectly possible to obtain insurance for the property if it is a second/holiday home.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
INSURANCE
An occupier’s liability insurance is highly advisable in France and is usually a condition of any mortgage (the cover note, attestation, will usually be required by the bank at completion). You will be responsible for insuring the property from the day of completion. In certain cases it is possible to take over the existing policy but it is often best to have this organised for completion so that you can ensure that you have the policy best suited to you, the value of your contents etc. It is perfectly possible to obtain insurance for the property if it is a second/holiday home.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
mercredi 31 mars 2010
COMPASS IMMOBILIER: Purchasing French Property - other fees and costs
OTHER FEES AND COSTS
There are potentially other fees and costs that may be incurred.
Purchase using a mortgage secured against the French property
This will give rise to an additional fee. This fee is charged by the notaire and is for the registration of the security against the property. It is calculated on a fixed scale and is in the region of 0.5 to 1% of the value of the mortgage. It is determined by function of the nature, type and amount of the mortgage and most importantly by the type of security that the lender takes against the property. The actual amount of this fee is therefore often only known at a very late stage when the mortgage is finalised, usually shortly before completion, although an estimate should be possible beforehand. This fee should always be borne in mind when determining whether to finance with a mortgage and when budgeting for payment of the final balance if there is a mortgage in place.
VAT or value added tax
VAT (TVA) is payable upon the sale of property to be or that is being constructed as well as upon the sale of property built within 5 years. The applicable VAT rate is 19.6%. Technically, the VAT is paid by the vendor but it always form part of the purchase price (again, this should be checked prior to making any commitment to a property).
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
There are potentially other fees and costs that may be incurred.
Purchase using a mortgage secured against the French property
This will give rise to an additional fee. This fee is charged by the notaire and is for the registration of the security against the property. It is calculated on a fixed scale and is in the region of 0.5 to 1% of the value of the mortgage. It is determined by function of the nature, type and amount of the mortgage and most importantly by the type of security that the lender takes against the property. The actual amount of this fee is therefore often only known at a very late stage when the mortgage is finalised, usually shortly before completion, although an estimate should be possible beforehand. This fee should always be borne in mind when determining whether to finance with a mortgage and when budgeting for payment of the final balance if there is a mortgage in place.
VAT or value added tax
VAT (TVA) is payable upon the sale of property to be or that is being constructed as well as upon the sale of property built within 5 years. The applicable VAT rate is 19.6%. Technically, the VAT is paid by the vendor but it always form part of the purchase price (again, this should be checked prior to making any commitment to a property).
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
vendredi 26 mars 2010
COMPASS IMMOBILIER: Purchasing French Property - costs
COSTS
The cost of a purchase is a very important question to be addressed, especially when you are at the very beginning of the process and are still at the stage of asking ‘Do I want to purchase a property in France?’
The costs involved in a purchase of French real estate are higher for the purchaser than those incurred when buying in some other countries. In principle, the purchaser is responsible for the costs and fees of the purchase. The main costs and fees are listed below:
AGENT’S FEE
This is generally around 6% of the purchase price. Legally, properties must be advertised including the agent's fee - this should be made clear in the actual advertisement and is usually indicated by way of the annotation ‘FAI’. If you are not sure then you should always check, particularly before making any form of commitment. Technically in the paperwork the fee will either feature as a separate item payable by the purchaser or it will be included as part of the purchase price payable by the vendor. If it is a separate item payable by the purchaser, this is an advantage for the buyer due to the fact that the notaire’s fee is slightly lower because it is calculated on the net price. The mandate with the agent for the sale of the property will determine which will be the case and the fee due will be listed therein. You are entitled to view this document.
The fee is only ever payable upon completion of the purchase.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
The cost of a purchase is a very important question to be addressed, especially when you are at the very beginning of the process and are still at the stage of asking ‘Do I want to purchase a property in France?’
The costs involved in a purchase of French real estate are higher for the purchaser than those incurred when buying in some other countries. In principle, the purchaser is responsible for the costs and fees of the purchase. The main costs and fees are listed below:
AGENT’S FEE
This is generally around 6% of the purchase price. Legally, properties must be advertised including the agent's fee - this should be made clear in the actual advertisement and is usually indicated by way of the annotation ‘FAI’. If you are not sure then you should always check, particularly before making any form of commitment. Technically in the paperwork the fee will either feature as a separate item payable by the purchaser or it will be included as part of the purchase price payable by the vendor. If it is a separate item payable by the purchaser, this is an advantage for the buyer due to the fact that the notaire’s fee is slightly lower because it is calculated on the net price. The mandate with the agent for the sale of the property will determine which will be the case and the fee due will be listed therein. You are entitled to view this document.
The fee is only ever payable upon completion of the purchase.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
mardi 23 mars 2010
COMPASS IMMOBILIER: Purchasing French Property - completion
Stage 4:
Completion
In France, completion occurs by the signing of a deed (acte authentique). The signing of the acte authentique will be witnessed by the notaire. The acte should contain full information about the purchasing parties, the property, title to the property, declarations for the taxation authorities and the results of the various checks, searches and reports. It should also contain details of how the purchasers will own the property between them.
All parties should be present at the signing. If one party cannot be present then a power of attorney (procuration) will have to be drafted. The signing and witnessing of this document can be subject to particular rules and the exact requirements will depend upon the precise circumstances. For example, it may be necessary to sign the procuration in front of a lawyer in the home country and then have it legalised by the insertion of what is known as an ‘apostille’.
Usually possession of the property is taken immediately after the acte has been signed and witnessed. This may not be the case if the property is rented out (on this point, particular care should be taken as tenants have extensive rights in France about which a purchaser should be fully aware before taking them on) or if it is the purchase of a new development of which the construction is still ongoing.
If the taking of possession is delayed for a reason such as to allow time for clearance of the property, it is possible to include a clause in the deed specifying a deadline for the handover of possession, with a sum withheld from the vendor until this is complied with and a daily penalty if the deadline is exceeded (known as a clause d’astreinte).
Payment of the purchase price and all the fees (minus any deposit that has already been paid) will be required in cleared funds before completion can occur. You should thus ensure that the payment is made in a timely fashion in a means acceptable to the notaire (often a direct bank transfer is the safest form of making the payment). Attention should be paid to the fact that delays can occur when transferring money to a notaire due to anti-money laundering regulations and you should preferably allow in the region of up to 5 working days to be certain that there is sufficient time for the funds to clear.
It is highly advisable to view the property prior to the completion to ensure that the vendor has respected his obligation to clear the property of furniture (unless it has been agreed otherwise), has not made any alterations to the property that were not agreed upon and generally to check that the property has not been damaged since the initial viewing. Also, you can ensure that any items that it was agreed should remain are still in the property. This is one way of safeguarding yourself against being the victim of one of the horror stories that many of us have heard about as immediate action can be taken in the event that the vendor has breached his or her obligations (for example by using a clause d’astreinte).
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
Completion
In France, completion occurs by the signing of a deed (acte authentique). The signing of the acte authentique will be witnessed by the notaire. The acte should contain full information about the purchasing parties, the property, title to the property, declarations for the taxation authorities and the results of the various checks, searches and reports. It should also contain details of how the purchasers will own the property between them.
All parties should be present at the signing. If one party cannot be present then a power of attorney (procuration) will have to be drafted. The signing and witnessing of this document can be subject to particular rules and the exact requirements will depend upon the precise circumstances. For example, it may be necessary to sign the procuration in front of a lawyer in the home country and then have it legalised by the insertion of what is known as an ‘apostille’.
Usually possession of the property is taken immediately after the acte has been signed and witnessed. This may not be the case if the property is rented out (on this point, particular care should be taken as tenants have extensive rights in France about which a purchaser should be fully aware before taking them on) or if it is the purchase of a new development of which the construction is still ongoing.
If the taking of possession is delayed for a reason such as to allow time for clearance of the property, it is possible to include a clause in the deed specifying a deadline for the handover of possession, with a sum withheld from the vendor until this is complied with and a daily penalty if the deadline is exceeded (known as a clause d’astreinte).
Payment of the purchase price and all the fees (minus any deposit that has already been paid) will be required in cleared funds before completion can occur. You should thus ensure that the payment is made in a timely fashion in a means acceptable to the notaire (often a direct bank transfer is the safest form of making the payment). Attention should be paid to the fact that delays can occur when transferring money to a notaire due to anti-money laundering regulations and you should preferably allow in the region of up to 5 working days to be certain that there is sufficient time for the funds to clear.
It is highly advisable to view the property prior to the completion to ensure that the vendor has respected his obligation to clear the property of furniture (unless it has been agreed otherwise), has not made any alterations to the property that were not agreed upon and generally to check that the property has not been damaged since the initial viewing. Also, you can ensure that any items that it was agreed should remain are still in the property. This is one way of safeguarding yourself against being the victim of one of the horror stories that many of us have heard about as immediate action can be taken in the event that the vendor has breached his or her obligations (for example by using a clause d’astreinte).
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
vendredi 19 mars 2010
COMPASS IMMOBILIER: Purchasing French Property - intermediary period
Stage 3:
The intermediary period
This is the period when the notaire will undertake his or her work in relation to the conveyancing process. This period only commences once the first contract has been finalised. The notaire is responsible for contacting the various administrative bodies to notify them of the sale, obtaining the necessary paperwork, commissioning the checks and searches etc.
The notaire will normally require copies of the following documents from you:
• birth certificate
• marriage and any divorce certificate(s)
• passport
• any other certificates that may be relevant e.g. death certificate of a late spouse.
Some notaires will require a translation of the original documents.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
The intermediary period
This is the period when the notaire will undertake his or her work in relation to the conveyancing process. This period only commences once the first contract has been finalised. The notaire is responsible for contacting the various administrative bodies to notify them of the sale, obtaining the necessary paperwork, commissioning the checks and searches etc.
The notaire will normally require copies of the following documents from you:
• birth certificate
• marriage and any divorce certificate(s)
• passport
• any other certificates that may be relevant e.g. death certificate of a late spouse.
Some notaires will require a translation of the original documents.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
vendredi 12 mars 2010
COMPASS IMMOBILIER: Purchasing French Property - first contract (part 2)
In relation to the asbestos, termite and lead reports, the general practice now is that these are drawn up and produced at the time of the first contract. Whether the reports are compulsory will depend upon the age of the property and, for termites, where it is situated geographically. In addition, there is now an energy performance report which is obligatory for most residential properties, as well as a natural and technological risks report and checks of any gas or electrical installations that date back more than 15 years. The cost of these reports is at the vendor's charge.
You will purchase the property in the condition that it is in upon the date of completion. The vendor, unless he or she is a professional in the real estate field, only owes you a guarantee for defects in certain narrow circumstances. It is very much a case of ‘caveat emptor’ or ‘buyer beware’.
In this context, it should be noted that surveys are not common practice in France, although they are gradually becoming more widely used. Should you require a survey then it is possible for one to be undertaken, though the person responsible for drafting the survey should of course be carefully chosen. The survey is almost always at the purchaser's charge. It is also advised that a survey should be completed prior to the cooling off period (referred to immediately below) to enable you to have the choice of not proceeding if you are not satisfied with the outcome. If the vendor agrees, it is possible to include a condition suspensive relating to the obtaining of the survey but this needs to be carefully worded to ensure that you are protected if the results are unsatisfactory. A general ‘subject to survey’ condition would not be sufficient.
You will benefit from a seven day cooling-off period at the first contract stage. The exact way this works will depend upon each case but usually the signed contract will be sent to you by recorded delivery letter. If you decide to withdraw during the cooling-off period, you do not have to provide a reason and any deposit paid must be returned within 21 days of the date of the withdrawal. The vendor does not benefit from a cooling-off period.
The deposit is also payable at this time. The deposit can be up to 10% of the purchase price and should be transferred directly to the notaire’s account or to the escrow account of an agent if there is such a facility. It will then be held until completion occurs and will be put towards the purchase price. It will not earn interest. The best means of paying the deposit is often by transfer to the notaire’s/agent’s bank account as there can be difficulties with cheques that are not drawn on a French bank account (even Euro cheques). Never pay cash as it can be impossible to prove payment and in the hands of an unscrupulous person it can disappear very quickly if a refund is claimed!
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
You will purchase the property in the condition that it is in upon the date of completion. The vendor, unless he or she is a professional in the real estate field, only owes you a guarantee for defects in certain narrow circumstances. It is very much a case of ‘caveat emptor’ or ‘buyer beware’.
In this context, it should be noted that surveys are not common practice in France, although they are gradually becoming more widely used. Should you require a survey then it is possible for one to be undertaken, though the person responsible for drafting the survey should of course be carefully chosen. The survey is almost always at the purchaser's charge. It is also advised that a survey should be completed prior to the cooling off period (referred to immediately below) to enable you to have the choice of not proceeding if you are not satisfied with the outcome. If the vendor agrees, it is possible to include a condition suspensive relating to the obtaining of the survey but this needs to be carefully worded to ensure that you are protected if the results are unsatisfactory. A general ‘subject to survey’ condition would not be sufficient.
You will benefit from a seven day cooling-off period at the first contract stage. The exact way this works will depend upon each case but usually the signed contract will be sent to you by recorded delivery letter. If you decide to withdraw during the cooling-off period, you do not have to provide a reason and any deposit paid must be returned within 21 days of the date of the withdrawal. The vendor does not benefit from a cooling-off period.
The deposit is also payable at this time. The deposit can be up to 10% of the purchase price and should be transferred directly to the notaire’s account or to the escrow account of an agent if there is such a facility. It will then be held until completion occurs and will be put towards the purchase price. It will not earn interest. The best means of paying the deposit is often by transfer to the notaire’s/agent’s bank account as there can be difficulties with cheques that are not drawn on a French bank account (even Euro cheques). Never pay cash as it can be impossible to prove payment and in the hands of an unscrupulous person it can disappear very quickly if a refund is claimed!
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
mardi 9 mars 2010
COMPASS IMMOBILIER: Purchasing French Property - first contract (part 1)
Stage 2:
The first contract
Those who have purchased property in certain countries will be all too aware of the fact that after an offer, several weeks can elapse before any binding agreement is entered into and then one party can pull out just before exchange of contracts with no recourse possible, thus leading to a loss of money and time. The French system seeks to avoid this possibility and it is this aspect which is fundamentally different from real estate purchases in some other countries.
In France, after an offer is made on a property and accepted, a compromis or sous-seing privé is drawn up. There are other forms of contract such as the promise to sell or purchase ('promesse de vente' or 'promesse d’achat') which function in a different manner and are most often encountered in the Paris region.
This contract can come very shortly after an offer, very occasionally even on the same day. It is extremely important because it lays down the terms and conditions of the purchase and governs the timetable, the checks to be made etc. Both parties will be tied into the purchase of the property subject to conditions that have to be met prior to completion taking place (conditions suspensives). If the conditions are met then the sale will occur. If they are not met, both parties will be free of any engagement and the deposit paid will be returned to the purchaser. If the conditions are met but one party decides not to go ahead, what occurs will normally be governed by the clause in the compromis in this respect (clause pénale) and one party can take legal action to force the other to respect his or her obligations. Generally if it is the purchaser who does not wish to proceed, he or she will lose the deposit and may be liable to pay additional compensation.
The following are types of conditions suspensives of a contract:
• that there is nothing in the town planning documentation that adversely affects the property or is likely to diminish its value e.g. a plan to build a TGV route across the garden;
• that there are no easements over the property that have not been revealed to the purchaser;
• that there is no mortgage over the property that cannot be paid off from the purchase price;
• that the purchaser obtains a mortgage;
• that outline planning permission is obtained for conversion or extension of the property.
There are also a number of other conditions that may be required depending upon the individual circumstances. Care should always be taken to ensure that these conditions are validly worded and offer as much protection as possible to the parties.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
The first contract
Those who have purchased property in certain countries will be all too aware of the fact that after an offer, several weeks can elapse before any binding agreement is entered into and then one party can pull out just before exchange of contracts with no recourse possible, thus leading to a loss of money and time. The French system seeks to avoid this possibility and it is this aspect which is fundamentally different from real estate purchases in some other countries.
In France, after an offer is made on a property and accepted, a compromis or sous-seing privé is drawn up. There are other forms of contract such as the promise to sell or purchase ('promesse de vente' or 'promesse d’achat') which function in a different manner and are most often encountered in the Paris region.
This contract can come very shortly after an offer, very occasionally even on the same day. It is extremely important because it lays down the terms and conditions of the purchase and governs the timetable, the checks to be made etc. Both parties will be tied into the purchase of the property subject to conditions that have to be met prior to completion taking place (conditions suspensives). If the conditions are met then the sale will occur. If they are not met, both parties will be free of any engagement and the deposit paid will be returned to the purchaser. If the conditions are met but one party decides not to go ahead, what occurs will normally be governed by the clause in the compromis in this respect (clause pénale) and one party can take legal action to force the other to respect his or her obligations. Generally if it is the purchaser who does not wish to proceed, he or she will lose the deposit and may be liable to pay additional compensation.
The following are types of conditions suspensives of a contract:
• that there is nothing in the town planning documentation that adversely affects the property or is likely to diminish its value e.g. a plan to build a TGV route across the garden;
• that there are no easements over the property that have not been revealed to the purchaser;
• that there is no mortgage over the property that cannot be paid off from the purchase price;
• that the purchaser obtains a mortgage;
• that outline planning permission is obtained for conversion or extension of the property.
There are also a number of other conditions that may be required depending upon the individual circumstances. Care should always be taken to ensure that these conditions are validly worded and offer as much protection as possible to the parties.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
vendredi 5 mars 2010
COMPASS IMMOBILIER: Purchasing French Property - viewing property
PROCEDURE
Stage 1:
Viewing the property
This will occur with either a representative of the estate agency or the vendor him or herself in the case of a direct purchase. You will normally be required to sign a ‘bon de visite’ at the time of the viewing if you have visited the property via the intermediary of an agent. This document attests to the fact that you viewed the property on that date and is essentially for the purposes of proving this fact if necessary.
When viewing, you may wish to take the opportunity to discuss various matters relating to the property and you may consider it prudent to take notes and photographs. Issues to discuss would include:
• drainage system;
• rights of way or other easements that may affect the property or that the property may benefit from;
• whether particular contents will be included in the purchase price or whether you can buy them separately;
• whether the property is sold with vacant possession. You should pay particular attention should you see that part of the property has livestock on it as rural tenancies (bail rural) can automatically transmit to new owners.
Copyright All Rights Reserved Victoria Headdo, Compass Immobilier
Stage 1:
Viewing the property
This will occur with either a representative of the estate agency or the vendor him or herself in the case of a direct purchase. You will normally be required to sign a ‘bon de visite’ at the time of the viewing if you have visited the property via the intermediary of an agent. This document attests to the fact that you viewed the property on that date and is essentially for the purposes of proving this fact if necessary.
When viewing, you may wish to take the opportunity to discuss various matters relating to the property and you may consider it prudent to take notes and photographs. Issues to discuss would include:
• drainage system;
• rights of way or other easements that may affect the property or that the property may benefit from;
• whether particular contents will be included in the purchase price or whether you can buy them separately;
• whether the property is sold with vacant possession. You should pay particular attention should you see that part of the property has livestock on it as rural tenancies (bail rural) can automatically transmit to new owners.
Copyright All Rights Reserved Victoria Headdo, Compass Immobilier
lundi 1 mars 2010
COMPASS IMMOBILIER: Purchasing French Property - Persons Involved - The Notaire
The notaire
The notaire is the lawyer responsible for handling the conveyancing process. Notaires can trace their routes back to the Egyptian scribes and it is their responsibility to draw up the deed signed upon completion (acte authentique). The registration of this deed is the formality required for legal recognition of the transfer of ownership and only a notaire based in France has the requisite power to do this. They will commission the various checks and searches relating to the property and will often draw up the first contract (usually a 'compromis' or 'sous-seing privé'). Their other principal responsibility is the collection of the taxes payable upon the sale of real estate which mainly consist of registration taxes (droits de mutation), capital gains tax (impôt sur la plus-value) and sometimes of VAT (TVA or 'taxe sur la valeur ajoutée') on behalf of the State’s tax authorities. Some notaires also sell houses so their office may be involved as an agent.
Those from countries based on Anglo-Saxon law will be used to each party having their own lawyer or advisor to represent them. In the French system, the notaire often represents both parties as he is seen as a neutral third party assisting the parties to conclude the purchase rather than defending the interests of either purchaser or vendor. This can seem very alien to those from more adversarial legal systems. It is possible for vendor and purchaser to have their own separate notaires and this may be advisable in certain cases. It will not cause an increase in costs as they will share the fee. The sharing of the fee can cause problems in its own right as one notaire often ends up doing more work for less money!
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
The notaire is the lawyer responsible for handling the conveyancing process. Notaires can trace their routes back to the Egyptian scribes and it is their responsibility to draw up the deed signed upon completion (acte authentique). The registration of this deed is the formality required for legal recognition of the transfer of ownership and only a notaire based in France has the requisite power to do this. They will commission the various checks and searches relating to the property and will often draw up the first contract (usually a 'compromis' or 'sous-seing privé'). Their other principal responsibility is the collection of the taxes payable upon the sale of real estate which mainly consist of registration taxes (droits de mutation), capital gains tax (impôt sur la plus-value) and sometimes of VAT (TVA or 'taxe sur la valeur ajoutée') on behalf of the State’s tax authorities. Some notaires also sell houses so their office may be involved as an agent.
Those from countries based on Anglo-Saxon law will be used to each party having their own lawyer or advisor to represent them. In the French system, the notaire often represents both parties as he is seen as a neutral third party assisting the parties to conclude the purchase rather than defending the interests of either purchaser or vendor. This can seem very alien to those from more adversarial legal systems. It is possible for vendor and purchaser to have their own separate notaires and this may be advisable in certain cases. It will not cause an increase in costs as they will share the fee. The sharing of the fee can cause problems in its own right as one notaire often ends up doing more work for less money!
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
mercredi 17 février 2010
COMPASS IMMOBILIER: Purchasing French Property - Persons Involved - The Estate Agent
PURCHASING FRENCH PROPERTY: PERSONS INVOLVED
The estate agent
Most properties in France will be offered through an estate agent (agent immobilier). The estate agency profession in France is highly regulated and in order to work as an estate agent a professional license (carte professionnelle) is required. To obtain the carte professionnelle, an estate agent has to fulfil a number of requirements including having attained a certain level of qualification or experience, and hold professional indemnity insurance and a financial guarantee. However, you may not always deal with the estate agent or one of his or her employees, but instead with somebody who has the status of a commercial agent (agent commercial). Commercial agents are self-employed people linked to the agent by a contract; they are entitled to show the property and close deals on the agent’s behalf. The status of some people can be unclear and you should always ensure that you are aware of what their actual status is. You are entitled to see their professional registration papers ('carte grise') as well as proof that they hold the requisite professional indemnity insurance. A commercial agent should always provide details of whose 'carte' they work under in their own publicity material.
In certain cases, properties may be marketed by individuals. Bear in mind when buying from an individual that you do not have the benefit of the agent’s professional indemnity insurance should there be problems. In addition, you will not have the benefit of a professional's expertise to advise and assist with the sale. Should somebody show you a property purportedly for sale by an individual and ask you for a fee for their services, he or she is not entitled to do so if they are not an estate agent, commercial agent or an employee of the estate agency with written authorisation (a mandate) from the vendor to sell the property on his or her behalf.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
The estate agent
Most properties in France will be offered through an estate agent (agent immobilier). The estate agency profession in France is highly regulated and in order to work as an estate agent a professional license (carte professionnelle) is required. To obtain the carte professionnelle, an estate agent has to fulfil a number of requirements including having attained a certain level of qualification or experience, and hold professional indemnity insurance and a financial guarantee. However, you may not always deal with the estate agent or one of his or her employees, but instead with somebody who has the status of a commercial agent (agent commercial). Commercial agents are self-employed people linked to the agent by a contract; they are entitled to show the property and close deals on the agent’s behalf. The status of some people can be unclear and you should always ensure that you are aware of what their actual status is. You are entitled to see their professional registration papers ('carte grise') as well as proof that they hold the requisite professional indemnity insurance. A commercial agent should always provide details of whose 'carte' they work under in their own publicity material.
In certain cases, properties may be marketed by individuals. Bear in mind when buying from an individual that you do not have the benefit of the agent’s professional indemnity insurance should there be problems. In addition, you will not have the benefit of a professional's expertise to advise and assist with the sale. Should somebody show you a property purportedly for sale by an individual and ask you for a fee for their services, he or she is not entitled to do so if they are not an estate agent, commercial agent or an employee of the estate agency with written authorisation (a mandate) from the vendor to sell the property on his or her behalf.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
jeudi 11 février 2010
COMPASS IMMOBILIER: TAXATION Part 3 - Wealth and Property Taxes
WEALTH TAX
This is a tax applicable to assets valued over 790,000 Euros and is called ISF or l’impôt de solidarité sur la fortune. For a non-resident, it is payable on the value of property owned in France; for a resident, it is payable on all assets (unless certain assets come within one of the categories of full or partial exoneration). The tax is payable on a sliding scale as follows:
Between 790,000 Euros and 1,290,000 Euros 0.55%
Between 1,290,000 Euros and 2,530,000 Euros 0.75%
Between 2,530,000 Euros and 3,980,000 Euros 1%
Between 3,980,000 Euros and 7,600,000 Euros 1.3%
Between 7,600,000 Euros and 16,540,000 Euros 1.65%
Above 16,540,000 Euros 1.8%
PROPERTY TAXES
There are two principal types of property tax:
· land tax (taxe foncière)
· occupancy tax (taxe d’habitation)
Both are calculated on the basis of the notional rental value of the property upon the first of January of each year. They are payable annually and the bills come out in the autumn.
Payment of the land tax is usually divided pro rata temporis between vendor and purchaser on the basis of the completion date of the purchase. The purchaser will be responsible for refunding any tax paid for that period directly to the vendor.
The occupancy tax is payable by the occupant of the property on the 1st January of any given year for the entire year. The purchaser, or other occupant, will be responsible for paying it for the year following the purchase and it is not divided in the same way as the land tax. The tax is payable on second homes but no liability arises if they are not furnished. The television licence is now included within this tax.
An estimate of the amount of the two taxes can often be provided at the time of viewing the property or at the first contract stage based upon the vendor’s contribution for the previous year.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
This is a tax applicable to assets valued over 790,000 Euros and is called ISF or l’impôt de solidarité sur la fortune. For a non-resident, it is payable on the value of property owned in France; for a resident, it is payable on all assets (unless certain assets come within one of the categories of full or partial exoneration). The tax is payable on a sliding scale as follows:
Between 790,000 Euros and 1,290,000 Euros 0.55%
Between 1,290,000 Euros and 2,530,000 Euros 0.75%
Between 2,530,000 Euros and 3,980,000 Euros 1%
Between 3,980,000 Euros and 7,600,000 Euros 1.3%
Between 7,600,000 Euros and 16,540,000 Euros 1.65%
Above 16,540,000 Euros 1.8%
PROPERTY TAXES
There are two principal types of property tax:
· land tax (taxe foncière)
· occupancy tax (taxe d’habitation)
Both are calculated on the basis of the notional rental value of the property upon the first of January of each year. They are payable annually and the bills come out in the autumn.
Payment of the land tax is usually divided pro rata temporis between vendor and purchaser on the basis of the completion date of the purchase. The purchaser will be responsible for refunding any tax paid for that period directly to the vendor.
The occupancy tax is payable by the occupant of the property on the 1st January of any given year for the entire year. The purchaser, or other occupant, will be responsible for paying it for the year following the purchase and it is not divided in the same way as the land tax. The tax is payable on second homes but no liability arises if they are not furnished. The television licence is now included within this tax.
An estimate of the amount of the two taxes can often be provided at the time of viewing the property or at the first contract stage based upon the vendor’s contribution for the previous year.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
mardi 9 février 2010
COMPASS IMMOBILIER: TAXATION Part 2 - Capital Gains tax
CAPITAL GAINS TAX
This is paid on the profit earned when a property is sold. The tax is calculated and paid upon completion of the transaction. The sale of the principal residence is exonerated from capital gains tax.
The rate of capital gains tax is 16% for an EU resident; 33.33% for a non-EU resident; and 27% for a French resident. Once property has been owned for more than five years, tapered relief of 10% per annum can be claimed, culminating in exoneration from capital gains tax after ownership for more than 15 years.
Unless property has been owned for more than 5 years, it is only possible to deduct certain renovation and construction costs which have been invoiced by a registered enterprise. After 5 years, 15% of the original purchase price can be offset against the gain to represent such costs where it is no longer possible to prove their actual value. This is applicable regardless of whether any work has actually been done.
There is a one-off exoneration applicable to EU citizens who have been tax resident in France for two years at some point in the past. The property must not be let out in the year of sale in order to benefit from the exoneration. It is now possible to benefit from this exoneration upon a second sale if it occurs more than five years after the first one, subject to conditions.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
This is paid on the profit earned when a property is sold. The tax is calculated and paid upon completion of the transaction. The sale of the principal residence is exonerated from capital gains tax.
The rate of capital gains tax is 16% for an EU resident; 33.33% for a non-EU resident; and 27% for a French resident. Once property has been owned for more than five years, tapered relief of 10% per annum can be claimed, culminating in exoneration from capital gains tax after ownership for more than 15 years.
Unless property has been owned for more than 5 years, it is only possible to deduct certain renovation and construction costs which have been invoiced by a registered enterprise. After 5 years, 15% of the original purchase price can be offset against the gain to represent such costs where it is no longer possible to prove their actual value. This is applicable regardless of whether any work has actually been done.
There is a one-off exoneration applicable to EU citizens who have been tax resident in France for two years at some point in the past. The property must not be let out in the year of sale in order to benefit from the exoneration. It is now possible to benefit from this exoneration upon a second sale if it occurs more than five years after the first one, subject to conditions.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
mercredi 3 février 2010
COMPASS IMMOBILIER: TAXATION Part 1 - Income Tax
INCOME TAX
Income tax is a consideration for those purchasing French real estate property in two situations: firstly, if the property is to generate an income by being rented out; secondly for those who become French residents.
The French tax year is based on a calendar year and returns are filed in the following spring e.g. spring 2010 for income earned in 2009. Non-residents file returns to the ‘Centre des impôts des non-résidents’ in Paris. The method of calculation of the tax due varies according to the nature and type of income. For example, if property is rented out furnished the tax is payable under the BIC regime. Under this regime, for income below either 80,300 Euros (furnished lets such as hotels, 'chambres d'hôtes', rural gîtes, furnished tourist lets) or 32,100 Euros (other types of furnished lets), it is possible to opt for taxation on a simplified basis (known as ‘micro-entreprise’) with a fixed deduction representing costs of either 71% or 50% (the latter being applicable to furnished lets) being applied to arrive at the taxable amount. As for unfurnished letting, for income below 15,000 Euros tax can be paid on a similar simplified basis (known as ‘micro-foncier’) with a fixed deduction representing costs of 30% to determine the amount upon which tax is payable. The new simplified regime of auto-entrepreneur may also be a possibility for this type of activity.
Those who become French tax residents are liable to taxation on their income wherever it is earned and regardless of whether or not it is not repatriated to France. The principal criterion for determining tax residency is physical presence in France e.g. more than 183 days out of a given calendar year.
Deductible personal allowances and relief are applied to the individual and the personal quota is determined. Factors taken into consideration include marital status, number of dependent children, age... The level of tax is calculated in accordance with the following sliding scale (figures for income tax for the year 2009 for which the return is submitted in 2010):
0% not exceeding 5 875 EUR 5.50 % between 5 875 EUR and 11 720 EUR 14 % between 11 720 EUR and 26 030 EUR 30 % between 26 030 EUR and 69 783 EUR 40 % above 69 783 EUR
Non-residents normally pay tax at a base rate of 20% with any tax falling into the higher brackets payable in accordance with the superior bands. The rules on the avoidance of double taxation are governed by any double taxation treaty between the country of residence of the individual and France.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
Income tax is a consideration for those purchasing French real estate property in two situations: firstly, if the property is to generate an income by being rented out; secondly for those who become French residents.
The French tax year is based on a calendar year and returns are filed in the following spring e.g. spring 2010 for income earned in 2009. Non-residents file returns to the ‘Centre des impôts des non-résidents’ in Paris. The method of calculation of the tax due varies according to the nature and type of income. For example, if property is rented out furnished the tax is payable under the BIC regime. Under this regime, for income below either 80,300 Euros (furnished lets such as hotels, 'chambres d'hôtes', rural gîtes, furnished tourist lets) or 32,100 Euros (other types of furnished lets), it is possible to opt for taxation on a simplified basis (known as ‘micro-entreprise’) with a fixed deduction representing costs of either 71% or 50% (the latter being applicable to furnished lets) being applied to arrive at the taxable amount. As for unfurnished letting, for income below 15,000 Euros tax can be paid on a similar simplified basis (known as ‘micro-foncier’) with a fixed deduction representing costs of 30% to determine the amount upon which tax is payable. The new simplified regime of auto-entrepreneur may also be a possibility for this type of activity.
Those who become French tax residents are liable to taxation on their income wherever it is earned and regardless of whether or not it is not repatriated to France. The principal criterion for determining tax residency is physical presence in France e.g. more than 183 days out of a given calendar year.
Deductible personal allowances and relief are applied to the individual and the personal quota is determined. Factors taken into consideration include marital status, number of dependent children, age... The level of tax is calculated in accordance with the following sliding scale (figures for income tax for the year 2009 for which the return is submitted in 2010):
0% not exceeding 5 875 EUR 5.50 % between 5 875 EUR and 11 720 EUR 14 % between 11 720 EUR and 26 030 EUR 30 % between 26 030 EUR and 69 783 EUR 40 % above 69 783 EUR
Non-residents normally pay tax at a base rate of 20% with any tax falling into the higher brackets payable in accordance with the superior bands. The rules on the avoidance of double taxation are governed by any double taxation treaty between the country of residence of the individual and France.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
mercredi 27 janvier 2010
COMPASS IMMOBILIER: French inheritance law part 3
LEAVING PROPERTY TO A CHARITY
This is a possibility for certain individuals who are not subject to the protected minimum interests outlined above. Any charity should be carefully chosen, however, as it should be registered and recognised as a charity in France to avoid adverse inheritance tax implications.
USE OF TRUSTS
The trust, familiar to many of us from Anglo-Saxon legal systems, is an alien concept in France. If one is considering using a trust in respect of French property, specialist advice should be sought because they can lead to the settlor’s wishes not being respected and adverse taxation outcomes. Given that a trust is not recognised in France as being a legal ‘person’, it is not possible to purchase a property in the name of trust.
COMPANIES
The purchase of real estate in France through a company, particularly the French property holding company known as an SCI (société civile immobilière), has been very fashionable in the past and can be suggested as a vehicle for minimising taxation and avoiding certain rules of French inheritance law.
They can be suitable for people in particular situations: for example unrelated people purchasing property together who wish for greater flexibility for future alterations to the title and a more business-like arrangement; or for those who wish to disinherit a child and who are definitely not intending to become French resident. Unmarried or same sex couples may also find them useful, particularly to retain control of the property and possibly minimise inheritance tax.
They may not, however, prove to be advisable in a certain number of cases where a better result may be achieved via other arrangements. The type of company used should be given careful consideration as there are a variety of taxation and practical issues involved.
Using a company for property ownership evidently increases the costs and administrative burden.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
This is a possibility for certain individuals who are not subject to the protected minimum interests outlined above. Any charity should be carefully chosen, however, as it should be registered and recognised as a charity in France to avoid adverse inheritance tax implications.
USE OF TRUSTS
The trust, familiar to many of us from Anglo-Saxon legal systems, is an alien concept in France. If one is considering using a trust in respect of French property, specialist advice should be sought because they can lead to the settlor’s wishes not being respected and adverse taxation outcomes. Given that a trust is not recognised in France as being a legal ‘person’, it is not possible to purchase a property in the name of trust.
COMPANIES
The purchase of real estate in France through a company, particularly the French property holding company known as an SCI (société civile immobilière), has been very fashionable in the past and can be suggested as a vehicle for minimising taxation and avoiding certain rules of French inheritance law.
They can be suitable for people in particular situations: for example unrelated people purchasing property together who wish for greater flexibility for future alterations to the title and a more business-like arrangement; or for those who wish to disinherit a child and who are definitely not intending to become French resident. Unmarried or same sex couples may also find them useful, particularly to retain control of the property and possibly minimise inheritance tax.
They may not, however, prove to be advisable in a certain number of cases where a better result may be achieved via other arrangements. The type of company used should be given careful consideration as there are a variety of taxation and practical issues involved.
Using a company for property ownership evidently increases the costs and administrative burden.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
mardi 26 janvier 2010
COMPASS IMMOBILIER: French inheritance law part 2
UNMARRIED OR SAME-SEX COUPLES
The inheritance position of unmarried or same-sex couples can be even more complex. A tontine clause is possible between an unmarried or same-sex couple but the inheritance tax implications are potentially significant. A company structure may be worth consideration to avoid certain of the complications that can arise with direct ownership without a tontine clause, allowing the surviving partner to retain control and possibly to alleviate the burden of inheritance tax.
INHERITANCE TAX
This operates in a manner very different to other countries. The tax is calculated on the basis of the amount that each person inherits and how he or she is related to the person who has passed away. Therefore, spouses; children and parents; and siblings are all subject to different inheritance tax treatment. Regard should always be had to the inheritance tax implications of any arrangement to select that which is most suitable.
Previously, a spouse benefited from an inheritance tax free band of 76,000 Euros with tax above this amount payable on a sliding scale of between 5% and 40% with the majority of most of the payment likely to fall within the 20% bracket which is the widest. However, a general spousal exoneration from inheritance tax has been introduced, although gifts remain taxable under the old rules (the applicable tax free band has now been increased to 79,533 Euros with a revision of the sliding scale).
Children and ascendants (i.e. parents) now benefit from an inheritance tax free band of 156,974 Euros each with tax above this amount payable on a sliding scale broadly similar to that aforementioned between spouses, although slightly less generous.
Brothers or sisters benefit from a tax free allowance of 15,697 Euros each and then pay tax at 35% on the first 24,069 Euros worth of property that is inherited and at 45% thereafter. Relatives up to the fifth degree of relationship pay tax at 55%. Nieces and nephews benefit from a tax free allowance of 7,849 Euros each. For other relatives there is a small tax free band of 1,570 Euros.
Upon property passing between people who are not related by blood or marriage, inheritance tax is payable at 60% (with a small tax free band of 1,570 Euros); this poses particular concern for unmarried or same sex couples. There are ways of minimising the inheritance tax liability, for example by an unmarried or same sex couple who meet the conditions entering into a special contract known as a PACS. There is now a general exoneration from inheritance tax for PACS partners too, although gifts continue to be taxed under the rules relating to spouses (tax free band of 79,533 Euros with tax payable above that on a recently updated sliding scale of between 5% and 40%). For those couples who have entered into other forms of partnerships, such as the UK Civil Partnership, these are now given legal recognition in France and they will benefit from the same tax treatment as those couples who have a PACS i.e. exoneration from inheritance tax for the surviving partner.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
The inheritance position of unmarried or same-sex couples can be even more complex. A tontine clause is possible between an unmarried or same-sex couple but the inheritance tax implications are potentially significant. A company structure may be worth consideration to avoid certain of the complications that can arise with direct ownership without a tontine clause, allowing the surviving partner to retain control and possibly to alleviate the burden of inheritance tax.
INHERITANCE TAX
This operates in a manner very different to other countries. The tax is calculated on the basis of the amount that each person inherits and how he or she is related to the person who has passed away. Therefore, spouses; children and parents; and siblings are all subject to different inheritance tax treatment. Regard should always be had to the inheritance tax implications of any arrangement to select that which is most suitable.
Previously, a spouse benefited from an inheritance tax free band of 76,000 Euros with tax above this amount payable on a sliding scale of between 5% and 40% with the majority of most of the payment likely to fall within the 20% bracket which is the widest. However, a general spousal exoneration from inheritance tax has been introduced, although gifts remain taxable under the old rules (the applicable tax free band has now been increased to 79,533 Euros with a revision of the sliding scale).
Children and ascendants (i.e. parents) now benefit from an inheritance tax free band of 156,974 Euros each with tax above this amount payable on a sliding scale broadly similar to that aforementioned between spouses, although slightly less generous.
Brothers or sisters benefit from a tax free allowance of 15,697 Euros each and then pay tax at 35% on the first 24,069 Euros worth of property that is inherited and at 45% thereafter. Relatives up to the fifth degree of relationship pay tax at 55%. Nieces and nephews benefit from a tax free allowance of 7,849 Euros each. For other relatives there is a small tax free band of 1,570 Euros.
Upon property passing between people who are not related by blood or marriage, inheritance tax is payable at 60% (with a small tax free band of 1,570 Euros); this poses particular concern for unmarried or same sex couples. There are ways of minimising the inheritance tax liability, for example by an unmarried or same sex couple who meet the conditions entering into a special contract known as a PACS. There is now a general exoneration from inheritance tax for PACS partners too, although gifts continue to be taxed under the rules relating to spouses (tax free band of 79,533 Euros with tax payable above that on a recently updated sliding scale of between 5% and 40%). For those couples who have entered into other forms of partnerships, such as the UK Civil Partnership, these are now given legal recognition in France and they will benefit from the same tax treatment as those couples who have a PACS i.e. exoneration from inheritance tax for the surviving partner.
Copyright All Rights Reserved Victoria Headdon, Compass Immobilier
jeudi 21 janvier 2010
French inheritance law - part 1
INHERITANCE
French inheritance law and taxation differ substantially from many other countries, especially Anglo Saxon law countries. It is important to address this issue at the purchasing stage because what is contained in the acte authentique will often determine what ultimately occurs in relation to the inheritance of the property. Individually tailored advice should be sought as the best solution will depend on a variety of factors, including family circumstances, place of domicile and the value of the property. It is for this reason that this guide does not seek to provide blanket inheritance advice. A summary of certain of the main issues is provided hereafter.
LIMITS TO TESTAMENTARY RIGHTS:
Certain of an individual’s closest relatives benefit from protected minimum interests in a share of property owned by that person i.e. children; grand-children if the children are pre-deceased. As of 1st January 2007 parents and other ascendants have lost their protected inheritance status and can now be disinherited. These protected beneficiaries are known as réservataires (forced heirs). A will that derogates from the protected rights of a réservataire cannot be fully applied. For example, in the presence of children simple wills benefiting the surviving spouse will not achieve the desired objective and the children will remain the prime beneficiaries. The interests of a réservataire thus supersede those of a spouse, unless express measures are taken to ensure that the spouse is the only beneficiary.
BENEFITING SPOUSES:
As mentioned above, a spouse will not always automatically inherit. His or her rights will depend in part upon how the purchase is structured e.g. what is stated in the deed of completion in relation to how the property is owned between the spouses, and also upon the family situation of the other spouse. Despite recent legislative changes improving the inheritance rights of a surviving spouse, care needs to be taken to ensure that they are adequately protected. The two principal methods for passing property to the surviving spouse are the ‘tontine clause’ and a change of matrimonial regime to adopt the French regime of ‘universal community’. The tontine clause is inserted into the acte authentique and means that upon the death of one spouse, the survivor is the sole owner of the property. The change of matrimonial regime to adopt the French regime of ‘universal community’ involves signing an act, usually immediately before completion, altering the law governing the matrimonial regime. The main advantage of such an act is that the surviving spouse will inherit property owned under the regime but without any inheritance tax liability (although this is now also the case with the tontine clause following the recent introduction of the spousal exoneration from inheritance tax). There is a fee attached to this mechanism due to the fact that a separate act is required. It is always important to consider the impact that such mechanisms will have on the ultimate inheritance of the property. For example, if one spouse has children from another relationship, these children could effectively be disinherited by such provisions. Those children can take legal action to overturn a change of matrimonial regime which would substantially prejudice the rights of the surviving spouse so the tontine clause may offer greater protection in such a situation due to the fact that it is more difficult to overturn. An alternative is for the beneficiaries of the deceased spouse to inherit and for the survivor to be left with a life interest known as an usufruit. This will ensure that the survivor benefits from exclusive use and possession of the property for the remainder of his or her lifetime. As well as ensuring that the respective families inherit equally, this method can have an inheritance tax advantage for a couple with children due the maximisation of the tax free allowances that it offers.
Copyright: Victoria Headdon, Compass Immobilier
Inscription à :
Articles (Atom)
