Property Taxes, Purchase Fees and Stamp Duty
Originally posted on & updated on 21st January, 2024
Our comprehensive specialist French property website is packed with expert advice and money saving tips. But one of the questions that keeps coming up is the subject of taxes and purchasing fees. That’s why the team got together to produce this small article which is aimed at shedding some light on what the different property taxes and fees are when buying a property in France.
The Buying Process in France
About the property buying process in France; the system is different in France to what you are used to back home, but it’s very straight forward and safe as it is geared towards protecting the buyer. The process starts once you’ve visited a property and made an offer on that dream property you’ve had your eyes on for such a long time.
Once your offer has been accepted, the property will come off the market and the agent will liaise with you and the notaire. The compulsory searches are at the charge of the seller and are carried out at this stage. Note that structural surveys are not common practice in France, you’ll need to get one arranged at your expense if you want one.
French Property Taxes
You would have been informed about (both) the property taxes and legal fees. There are two different taxes for property owners in France; the first one is the taxe FONCIERE (or land tax), the second one is the taxe d’HABITATION (council tax) which is provided for guidance only as it is means tested.
The “taxe FONCIERE” is the LAND tax that is imposed on a property owner on the 1st of January each year, the price for this depends on the region you live, the amount of land owned and what the local rental values are. It is usually much cheaper that in the UK.
The “taxe d’HABITATION” is paid by whoever lives in the property, if rented out it would be the responsibility of the tenants to pay, similar to council tax in the UK. The price, again, varies depending on the location of the property. Towns are generally more expensive than villages, and properties in the countryside are also cheaper.
Paying the Deposit
The ‘compromis de vente’ is drawn fairly early and you have a 10 day cooling off period from the signature date before you are legally committed. At this stage you still haven’t paid the deposit, only when you have returned the compromis de vente duly signed to the notaire in France.
The deposit is usually around 10% of the total amount, the balance is paid on completion to the notaire. From signing to completion, you can expect approx 3 months, this longer will typically be longer when finance/mortgage are required. It’s worth researching currency transfers and the options to secure the exact rate that you want to secure.
Legal or Notaire Fees
The legal fees are called ‘frais de Notaires’ or notary fees, they are usually around 6-7% of the net selling price, and include the stamp duty. You can easily estimate the notaire fees will be with our handy legal fees calculator.
Estate Agency Fees
These are called ‘frais d’agence’ in french, and remember that the estate agency fee is included in the listed price on the website. They can sometimes be listed as FAI or HAI on some french immobiliers websites. There’s nothing extra to pay to work with us or any of the real estate agents in our network.
House Insurance is Compulsory
It’s worth noting that house insurance (content & liability) is compulsory on completion. This means that the notaire or agent will not give you the keys of your dream house if it doesn’t have a suitable insurance cover when you have signed on the dotted line. Take a look at our French insurance services.
About Wealth Tax
For our investors and chateau buyers, from 1st January 2018, the scope of wealth tax is limited to real estate assets only, thus, any savings or investments, including life insurance policies, are exempt from wealth tax. The previous threshold of €1,300,000 remains and the scale rates of wealth tax remain the same as before.
French Tax Experts
Our UK based French tax and law experts specialise in French/UK private client issues, including taxation, wealth tax, succession, real estate, trust, probate, disputes, etc. They have extensive knowledge of French tax and law can also assist with UK litigation, corporate and real estate. Visit the tax page for more details.
For more information about buying in France search our blog, visit our buying guide pages or contact us with your wish-list and timeline.
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