French legalities on purchasing your home in the Aude
There are many
very good web sites that can give you all the legal jargon
that you need on French tax
laws. However,
listed out below are some very important facts that you
will need to know about before launching forth with
your home
purchase.
The purchase
• Once the offer has been made to the vendor and has been
accepted, a “Compromis de Vente” (intended sale) will be
drawn up and a 10% deposit will be paid. This is legally
binding, and avoids being gazumped! You have a 7 day
cooling off period.
• Once local searches and a certificate of “Free Title”
have been obtained from the Land Registry, completion date
can be set.
• In the Notaire's office, the “Acte de Vente” is signed.
At this point, the final amount of 90% is paid. Also,
Government taxes and Notaire's fees need to be paid.
French Government taxes
• Houses less than 5 years old, taxes are 2.5% of the
purchase price (no Stamp Duty payable).
• Houses more than 5 years old, taxes are between 10 and
12% of the purchase price.
Renting properties
Be aware that if you rent your property that is furnished,
you will be taxed on running a commercial business. As a UK
resident, you pay French income tax on the profits after
deductions for repairs and in some cases, mortgage
interest.
Selling French properties
If you sell your home as a non French resident, you are
liable to French Capital Gains Tax. On the other hand, if
you become a resident in France for a minimum of one tax
year, gains on your main residence are exempt from tax.
Heirship
It is highly recommended making a Will through the Notaire
when your home has been purchased as French law is very
different to UK law. It is very complex and you will need
to get good advice.
Social Services and charges.
Under retirement age, you may be required to contribute
about 8% of your income to French National Insurance. This
is higher than the UK but benefits are generally better. If
you intend to run a small business (gite, B & B) expect
to pay 20% of turnover in National Insurance contributions,
and income tax rates can be very high too. There are ways
to reduce this, and you will need to get advice. One idea
is to plan to use a UK company for your business in France
which can hugely reduce your liability, and in some cases
this UK company will allow you to make up to £10 000 p.a.
tax free.
Termite and lead inspection
Generally, surveys are not undertaken before exchange.
However, if you require one, there are people who can
undertake such activity ( see Classifieds). The most
important action to take before exchanging money is to
have an authorized inspector visit the property and
report on termite infestation and the possible existence
of lead and asbestos ( see Classifieds)
(Note:
Propertyserviceslanguedoc.com and its representatives
accept no responsibility for misinformation or incorrect
advice. You are advised to get professional opinion on
legal and financial matters.)
French Legalities on Purchasing your Home in the Aude
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