There are no
restrictions on UK
citizens buying a French ski property and typically the process takes between
3-4 months. However, unlike the UK,
the property purchase becomes binding at a much earlier stage.
Set out below is a summary of some of the key considerations for buying a french
ski property in France.
This summary is intended as a guide and is in no way legally binding. Should
you wish to have more detailed advice on the property purchase process, French
Alpine Property will be happy to introduce prospective buyers to specific
French ski property advisors in the financial and legal areas as required.
To acquire a French ski property, buyers must instruct a French notary (“notaire”)
who will ensure all legal formalities are dealt with and register the property
purchase. In most cases the French notary represents both the buyer and the
seller, and oversees the ski property sale and purchase. Buyers may also need
advice from a French tax advisor on French tax implications and a French
property lawyer on any legal implications or inheritance issues. Purchases
become binding 7 days after both parties have signed and received a copy of the
reservation contract (new builds) or compromis de vente (re-sales). These
documents set out the main terms of the agreement between the buyer and the
seller. The buyer can withdraw from the sale at any time during the 7 day
'cooling-off' period. These documents may contain suspensive clauses which
allow the buyer to withdraw from the purchase under certain specified
circumstances, for example, inability to secure a mortgage loan. The seller
cannot withdraw from the property sale.
Properties in French ski resorts fall into two main types: off-plan new builds
Off-plan new builds in French ski resorts off-plan new builds are sold
as either classic freehold properties purely for your own use and enjoyment or
they may be part of a leaseback scheme. Under the leaseback scheme the buyer
purchases the property freehold and leases it back immediately to the developer
for a defined number of years, usually 9 or 11. The buyer is entitled to use
the ski property during specified weeks each year, and receives a small
guaranteed rental income. The buyer can also recover the VAT (or
"TVA") on the purchase price, a saving of 19.6%. The only restriction
on further sale of the leaseback property is that the new purchaser must accept
the terms of the lease or find a new buyer who will take over the existing
lease which is binding. The owner cannot amend the interior whilst the ski
property is in the leaseback scheme, this is maintained by a management company.
Notary fees on new builds or properties under five years old which are subject
to VAT are reduced to between 2-3%.
Re-sale properties are sold by private owners or estate agents. The
buyer purchases the property freehold and is free to use, rent, renovate or
sell the property. Notary fees for these older properties are between 6-8%.
The reservation deposit for a new build is set at anything between 2-5%
depending on the stage of the development. In the case of re-sales the deposit
is usually 10% of the net purchase price. The deposit is payable 7 days after
signature of the reservation contract or compromis de vente. The buyer loses
the full amount of the deposit if he later withdraws from the sale and the
cooling off period has expired. The remainder of the purchase price is payable
either in stage payments for new builds as the building progresses or on
signature of the final contract in the case of re-sales.
There is no legal obligation for the buyer to carry out a survey in France.
However, it is compulsory for the seller to provide the buyer with surveys on
lead poisoning, asbestos, termites, and thermal diagnostic tests together with
area measurements according to the type of property and location.
French inheritance laws apply to all property purchases in France even if the owner is resident outside of France.
French inheritance law differs greatly from UK law and it is essential to take
legal advice from a solicitor dealing with French conveyancing law.
VAT of 19.6% is payable on the purchase of a new build being sold for the first
time or re-sold within the first 5 years, and is usually built into the
purchase price. Local property taxes (taxe d'habitation and taxe foncière)
based on the size of the property are payable at a rate set by the région,
département and commune.
Rental income must be declared in the country of residency (so a UK resident must declare rental income in the UK)
each year. Credit may be claimed for any French tax paid against any liability
in your own country.
Mortgage interest rates are reasonably low in France. Typically, French banks
will lend up to 80% of the purchase price over 25 years and at an interest rate
of around 4%.
Buyers of a french ski property such as an apartment in a co-owned building
must also contribute to annual running costs of the whole building. Costs
differ from property to property depending on the facilities and are generally
divided up between the owners in proportion to their apartment size. Payable
yearly, half-yearly or quarter-yearly they cover outgoings such as
administration and expenses, a caretaker, insurance, garden and pathway
maintenance, utilities and building maintenance costs.