The process for buying a property in France is the same for non-EU nationals as it is for those inside the EU, and indeed, for French nationals, although the amount of time you can spend at your property will depend on your visa/residency status. As always when buying a property abroad, it is important to understand the buying process, as it differs from country to country. In France, for example, you must always use a notaire to buy or sell a property.
When buying or travelling from a distance it is all the more important to do your research so you can make the most of the time you have in France looking for a property. There is much you can do before you go and it will also pay dividends to build good relationships with property professionals who will be on hand to help you.
A good agent is worth their weight in gold, and you’ll often find that in France they’ll go the extra mile to help you. For example, they may well recommend builders and assist you with insurance needs. It may also be worth using a property finder to do the legwork for you. There are plenty of English-speaking agents on hand, but those buyers who speak neither French nor English will need to factor in translation, both verbal and written, and especially for legal contracts.
Inheritance rules for non-EU residents
An important aspect to consider when buying a property in France is inheritance law; in accordance with the EU Succession Regulation that came into force in 2015, the inheritance rules of either France or your home country may apply, depending on your circumstances.
“Now that France is a member state of the EU Succession Regulation, non-French inheritance law rules may well be relevant in relation to the French property, in the event that the owner should die with the French property being included in the estate,” comments Matthew Cameron, of Ashtons Legal. “Despite the fact that this regulation will have been intended in part to simplify international estate administration, it can lead to certain difficulties. Notairesin France will still need to deal with the French part of the estate, yet they may be obliged to impose the inheritance rules of another jurisdiction, whatever jurisdiction that may be.”
A specialist firm dealing with French law and tax may be able to advise on how best to structure the French property purchase, and discuss what form of wills may be suitable, if any, but local advice from your home country is important too. “Even if a non-EU buyer remains resident outside of France, their death may give rise to an obligation to pay inheritance tax in France, generally in relation to the value of the estate in France,” adds Matthew.
“French inheritance tax is personal to each beneficiary. Exemptions may apply, and the rates of tax and level of tax-free allowances will vary depending on the proximity of the relationship between the deceased and the beneficiary. It is prudent to seek advice on potential French inheritance tax liabilities at an early stage. It’s important to establish if there are any consequent tax liabilities in the buyer’s home country, and whether any tax relief can be claimed against tax already paid in France.”
Another point to take into consideration is French wealth tax, as Matthew explains: “This may be a factor where the net value of the French estate is greater than the minimum threshold (€1.3m in 2017). What is comprised in the French estate may depend upon a person’s circumstances. If the owner lives in a jurisdiction where wealth tax applies then it is possible that the French wealth tax could be credited against the tax due, although local advice would be necessary here.
“There may well be tax rules to observe both in France and in the home jurisdiction. Rules vary between countries so it is important to ensure that local advice is sought from a person’s jurisdiction of residence in addition to any French tax and law requirements.”
Source : Karen Tait, French Propert News (June 2017)