All you need to know when buying and financing real estate 
There are, of course, various tax and legal implications involved in the purchase and subsequent sale of any property in France; whether it’s to be your main residence, holiday home or rental investment. How you finance your property will affect the transaction. It is best to have worked out as many financial elements as possible early on in the process. For instance, you should establish what exactly your budget is before making mortgage inquiries and filling in preliminary applications. You should also be aware of the various expenses and fees associated with the purchase.
LOCAL TAXES
The French tax system is complicated and differs significantly from many other countries. For example, there is a distinction between ownership of a property and usage of it.
There are two local taxes, called the “taxe d'habitation” and the “taxe foncière”.
The rates of tax vary across the country, due to the varying rates of tax imposed by the regional and local governments.
“Taxe d’Habitation”
The “taxe d'habitation” is payable by the occupier of a French residential property, who was occupying the property on 1st January.
“Taxe Foncière”
The “taxe foncière” is payable by the owner of a French home.
Unlike the “taxe d'habitation”, at the time of purchase apportionment can be made between the buyer and seller, although it needs to be stated in the contract for sale.
There are two local taxes, called the “taxe d'habitation” and the “taxe foncière”.
The rates of tax vary across the country, due to the varying rates of tax imposed by the regional and local governments.
“Taxe d’Habitation”
The “taxe d'habitation” is payable by the occupier of a French residential property, who was occupying the property on 1st January.
“Taxe Foncière”
The “taxe foncière” is payable by the owner of a French home.
Unlike the “taxe d'habitation”, at the time of purchase apportionment can be made between the buyer and seller, although it needs to be stated in the contract for sale.
INCOME TAX
When you buy your property, you should register with the French Taxation Centre for Non-Residents. You will be sent an annual tax return which can prove invaluable as a record of your assets in France should you decide to sell your property, the proceeds of which may be subject to capital gains tax. Provided no income is made on the property (you do not rent it out, for example) your tax return will be left blank.
France has various double-taxation agreements with other countries. These offer favourable arrangements, particularly with regard to rental income. We recommend that you contact a fiscal adviser to ensure you comply with tax legislation.
France has various double-taxation agreements with other countries. These offer favourable arrangements, particularly with regard to rental income. We recommend that you contact a fiscal adviser to ensure you comply with tax legislation.
LEGAL FEES
There are 3 types of legal fees associated with purchasing a property in France. Costs for all 3 combined will total approximately 6-7% of the purchase price for a second hand property and 2-3% for a new property which include the notary’s conveyancing fees;
These fees and costs are commonly referred as “notaire’s fees” and are added to the purchase price, they are primarily taxes and disbursements which are collected by the notary on behalf of the French government.
These fees and costs are commonly referred as “notaire’s fees” and are added to the purchase price, they are primarily taxes and disbursements which are collected by the notary on behalf of the French government.
