French Inheritance Laws : What is a Tontine Clause?

Here’s some inheritance-related information about buying property and real estate en tontine, or with a tontine pact. But first, just what is a tontine clause?

The tontine clause (also called ‘tontine pacte’) may be an option to consider if you are buying a French property as a couple. It avoids the risks of undivided ownership and guarantees the survivor’s ownership of the entire property.

How Does a Tontine Work in France?

This applies to the house only and forms part of the purchase contract (compromis de vente), it applies to married and unmarried couples, partners or friends. With this clause, you buy together, but no one knows who the owner is until one of the parties has passed away, and it is considered the survivor’s property from the date of purchase. The remaining owner may do what they wish with the property, including selling it if they don’t want to keep it.

Is it Suitable for our Inheritance Plans?

But the tontine may not be suitable for your personal circumstances and can, at times, turn into a trap: during the buyers’ lifetimes, unanimity must be sought to do or change anything. If the buyers no longer get along, the tontine must be cancelled to allow one of the parties to purchase the property.

Unanimity is required to sell, because in the case of the tontine (or accretion clause), the concept of “no one may be forced to remain in a state of undivided ownership” is not applicable.

Upon the Death of One of You

The predeceased person is declared never to have bought; only the surviving buyer is considered the owner from the start. The benefit is that there is no inheritance/heirs, but keep in mind that the payment of inheritance tax is due, as in common law, based on the total value of the property.

People who are neither married nor in a civil partnership will be taxed at 60%. No inheritance tax will be due if the property is the main residence of both people and the property value is less than €76,000 at the time of death.

For more details on buying real estate en tontine, you contact our legal experts or your notary, who will be able to advise you. Take a look at our buying guide for more information about the purchase process, and tell us about your plans so we can help find your property in France.