From a vendor’s point of view, 2008 was a difficult year for selling property in France as prices dropped by an average of 20% during the year. Potential buyers were(generally speaking) very nervous about committing to a purchase. In addition, intent on getting a bargain, their offers were often insulting.

However from a buyer’s point of view, not such a bad year due to the drop in prices and the negotiating lengths that certain vendors were prepared to stretch to. In addition, interest rates dropped and those that are in the French tax system can benefit from tax relief on the interest that they pay on their mortgage thanks to Sarkozy’s inventive schemes. On the other hand, and on a less cheery note - banks have tightened-up on their lending criteria and buyers’ dreams were sometimes shattered by mortgages being turned down.

The pound has of course dropped even further against the Euro. For British people wishing to sell their French property and convert their Euros back in to Sterling, the strong Euro should off-set the drop in prices. For example, a British couple that purchased a property in France 8 years ago for 150,000 Euro would gain aprox. £35,000 on the exchange rate alone, if they had to sell it again today for 150,000 Euros.

For English buyers who are discouraged by the poor exchange rate, it is important to realise that prices have fallen to 2005/2006‘s levels and that this drop should partly compensate for the poor exchange. For those that require a mortgage, it is definitely worth enquiring through a French bank as the drop in interest rates and the fixed rates that are habitual in France, can also help you to recoup some of your losses from the exchange rate. Finally, do not hesitate to transfer your currency through a specialised currency broker as they can obtain beneficial commercial rates and also enable you to secure and forward book an exchange rate.

The rental market is still very buoyant in France and returns on investment of up to 7.5% are perfectly feasible – better than any bank could offer you and certainly less risky than the stock exchange !

For buyers’ protection, a new diagnostic will be compulsory as from January 1st 2009, which consists of a full verification of the wiring and electrical installation of the property. This adds to the asbestos, lead (for presence of lead in paint only), gas and energy performance reports which are already obligatory.

Let’s hope that 2009 will bring more stability to the markets and that many of you manage to fulfil your dreams!

All best wishes for a very healthy and successful new year.

An important contract symbolising a commitment between buyer and seller to transfer a given property, at a given price, with or without specific conditions.

This can be a simple document clearly identifying the vendor, the buyer, the property, its price, an approximate completion date and signed by both parties.

In the case where a loan or mortgage is required – the law requires a specific clause stipulating that the purchase is subject to a loan and that if it is NOT obtained, the contract becomes null and void. The clause does, of course, impose a time delay and other specific obligations.

As a general rule, and to show commitment – the buyer pays a deposit of 10% of the purchase price upon signing the “compomis”.

After signing, the buyer (and only the buyer) disposes of a 7-day cooling off period should he wish to withdraw from the purchase.

A “compromis” outlines the financial penalties for which a vendor or buyer would be liable, should he withdraw from his commitments beyond the 7-day cooling off period.
The penalty consists of 10% of the purchase price PLUS the agency’s commission.

After signing the « compromis », allow approximately 2 months before completion which will secure the transfer of the property.

It is preferable to have a « compromis » drawn up by an estate agent or Notary in order to avoid any unpleasant surprises (rights of way, easements, problems relating to sewerage, buyers funding of the acquisition etc….).

Once price has been agreed on by both parties, we draw-up the "compromis" or preliminary contract. For this,we need to retrieve a number of documents from the vendor including his title deeds, and then prepare a thorough legal document. After signing this, the buyer has a 7-day withdrawal period and we can only submit the contract to the Notary once this 7-day period is up.

The Notary then sets about his conveyancing, which basically involves :
- verifying the full legal identity of the seller and buyer,
- checking the vendor's legal rights to sell the property and that there are no outstanding loans or mortgages on the property than cannot be covered by the selling price,
- identification of the property and it's cadastral references,
- contacting the local authorities to check that there are no planned restriction or developments that would prevent the buyer from putting the property to it's intended use,
- verifying rights of way, servitudes to neighbouring properties, details of lease where a property is sold with a tenant in place,
- addressing preemption issues.

A certificate of "free title" is obtained from the equivalent of the land registry (Conservation des Hypothèques) and a certificat d'urbanisme is obtained from the local authority which declares any administrative requirements or restrictions which apply to the property.

Once all the above has been verified, the "temporary deeds" are drawn-up and completion can take place. The final deeds are sent aproximately 6 months afterwards by the land-registry administrative office.

You will be liable for capital gains tax in France when you resale your property in the following cases:

• The property is a holiday home and not your main residence
• It is your main (and only) residence but you are NOT registered in the French tax system* or have not been in the French tax system for 2 years prior to selling.


You will NOT be liable:

• If you have owned the property for more than 15 years
• If the property is your main home and you are in the French tax system*, and have been for 2 years prior to selling.


In order to qualify as being in the French tax system, a tax return declaring your earnings (“Déclaration des Revenus”) must have been filed with the French tax authorities. Merely paying “taxe d’habitation” and “taxe foncière” does not qualify you as being in the French tax system.

Even if your earnings in France or anywhere else are “zero” – a tax return still has to be filed.