Welcome to the French Property Law Blog

This blog is written by John Kitching, an English Solicitor who is a specialised bilingual French Property lawyer who has an interest in all things French, including French property and international estates.

The blog posts updates of particular interest to British nationals who have property in France, those who inherit property in France, or who are buying property in France. The posts range from French tax articles to quirky French news stories, and the inevitable anecdotes of aggrieved mistresses and widows disinherited by illegitimate children...

The blog does not give legal advice. If you require French legal advice, please visit www.frenchlawconsultancy.com or email info@frenchlawconsultancy.com


Thursday 25 November 2010

French property market still rising

In the Paris area, the number of sales for the 3rd trimester has increased by 23% year on year, and in France generally the market activity is broadly back to where it was prior to the financial crisis.

Property prices in Paris Ile-de-France continue to rise, with prices up over 10% year on year, and up 4.1% over the three months to September.

Is it time to invest before prices go up further?

Should you make an offer on a property and need the contract promptly checking before paying a deposit and before signing it, please contact French Law Consultancy www.frenchlawconsultancy.com

Tuesday 16 November 2010

Civil Partnership now recognised in France

After years of controversy, France has finally amended its legislation and now recognises UK registered Civil Partnerships and affords them similar status and benefits to a French PACS agreement, including an exemption for inheritance tax purposes.

The new law came into effect on 14 May 2009, although for Civil Partners who have paid tax on a gift or inheritance since 22 August 2007, a reclaim may be possible.

Prior to 14 May 2009, UK Civil Partners leaving French property to their Civil Partner would have faced inheritance tax at 60%, the rate applicable for transfers to non-blood relatives. There is a full exemption for spouses and for PACS couples. The PACS agreement allows same sex or different sex partners who are not married, to register their partnership and benefit from similar tax breaks to married couples, including a full exemption on inheritance tax. However, you had to be free to marry in order to be eligible to register as a PACS couple. UK Civil Partners were not able to register for this reason.

An interesting footnote to the new law allows a reclaim of tax for Registered Civil Partners where the date of the gift or the date of the probate was after 22 August 2007

For more information please contact French Law Consultancy www.frenchlawconsultancy.com

Tuesday 3 August 2010

French property price rise continues

According to the Paris Chamber of Notaires, property prices in Paris have increased by 5.1% year on year, and in 2010 in France as a whole prices are expected to follow suite, although twice as slowly. The property market is attracting more movement with 700,000 sales agreed in 2010, this is thought to be due to the return of foreign investors and the continued low interest rates. If you are considering purchasing a French property while the prices are affordable, and with a pound Sterling still worth around 1.20 Euros, make sure you read the article below before signing any French contract. For more information on French Property Law see www.frenchlawconsultancy.com

Friday 16 July 2010

Selling French property

Whilst sales of French property are slowly picking up as Sterling has regained some ground against the Euro, John Kitching, French law Solicitor reports that there are plenty of British sellers of French property wanting to sell before the exchange rate creeps too far towards Sterling.
As things stand, a healthy profit can still usually be had for those who purchased French property over 2 years ago when Sterling was strong against the Euro, and despite the recent gains, there is still a decent healthy 20% profit to be had even where the property Euro value has remained the same. Make sure you seek independent legal advice before signing Agent contracts or sale contracts, and make sure that you declare the currency gain for capital gains tax. To maximise your gains, be sure to consider using a reputable currency dealer, as there may be significant savings to be had compared with using your high street bank. We can recommend currency dealers, and advise on all contractual issues.

Remember, the golden rule: do not sign anything without taking proper independent legal advice.

French Law Consultancy can usually check basic documents on a same day basis, so there would be minimal delay. Take advice, get it right and relax. For more information visit www.frenchlawconsultancy.com or email John Kitching, a bilingual French law solicitor john@frenchlawconsultancy.com or telephone +44 (0)1663 74 54 88

Monday 28 June 2010

Found a French Property for sale? Be careful what you sign!

Browsing through the windows of the Agent Immobilier, you may well stumble upon the French property of your dreams. You are only in France for a week or so and you want to make sure this dream French property does not escape you, so you go into the Estate Agent, make an offer and sign whatever they tell you to sign, and pay whatever deposit they ask for. On the journey home, you start to reflect on things. What have you just signed? It was in legal French, did you really understand it? The Agent said it was OK to sign, and he seemed trustworthy....but he would wouldn't he? Where did you really pay your deposit to? Can you recover the deposit if you pull out of the purchase? Have you committed yourself to harsh conditions? What if the property has something wrong with it?

I hear this scenario on a regular basis, and clients hesitantly approach me realising that they have perhaps not exercised the level of caution they would if they were buying a property in the UK.

Ideally, you should never sign anything that you have not had checked by an expert independent lawyer familiar with English law and French law. You should not pay a deposit without understanding where it is going and what the terms are for holding and returning it.

It can be hard when you are being pressured to sign and the Agent reassures you that everything is OK, but a good agent will not object to you having the contract independently checked, and make no mistake, whatever you are asked to sign will be a form of contract committing you to its terms, whether called a pre-contract or an offre d'achat or a promesse de vente. Get it checked. We can usually check basic documents on a same day basis, so there would be minimal delay. Take advice, get it right, relax and enjoy your dream French property purchase. For more information visit www.frenchlawconsultancy.com or email John Kitching, a bilingual French law solicitor john@frenchlawconsultancy.com or telephone +44 (0)1663 74 54 88

Wednesday 23 June 2010

France out of World cup

Those who registered an interest in a free French Will package should France have made it through the group stages will be disappointed that Les Bleus did not manage to pull it off, eventually losing 2-1 to South Africa. However, the French Will package is being offered to them at half price as a gesture of good will. Eyes now turn to England to see if they can scrape through against the mighty Slovenians!

Friday 18 June 2010

Free Will if Les Bleus make it through!

Oh dear, losing against Mexico and drawing against Uruguay is not quite what France was expecting. They are on the verge of failing to qualify for the knock out stages. However, if France DO qualify for the next round of the 2010 football World Cup, I should be happy to offer a Free French Will package. All you need to do is register your interest with me before France's next match kicks off at 3pm on Tuesday 22nd June 2010.

Simply email john@frenchlawconsultancy.com with the subject heading Free French Will and give your name, address and contact details in the email.

Good luck!
John Kitching
French Law Solicitor

Wednesday 2 June 2010

£1 finally hits 1.20€ - highest for 18 months

According to some currency dealers, the technical levels for exchange rates have finally attained 1.20 Euros per pound, the strongest position of the pound against the Euro for 18 months.

This is still only the technical level for large commercial level currency transactions, but it remains the highest level since 2008, and results from the recently weakening Euro and a few days of volatile currency rates. The Euro is currently at its lowest rate against the US dollar since April 2006.

The 1.20 €/£ rate is expected to trigger a flood of property transactions from purchasers who have secured the exchange rate through a "forward contract", although the rate has not yet passed down to all but the most expensive property transactions. However, given the volatility of the markets over the past weeks, this level may come or go rapidly. If you are considering purchasing French property, it would be wise to contact a currency dealer to discuss securing an exchange rate and to discuss the prospects for the currency market.

We are happy to independently recommend currency dealers if you require assistance.

John Kitching French Law Solicitor www.frenchlawconsultancy.com info@frenchlawconsultancy.com


French Property prices - Paris on the up

The average French Property price continues to rise in Paris, according to a study from website drimki.fr . As shown from the data, location is all important. Some areas perform well, while others continue to struggle.
The chart below shows the district of Paris, the average price per square metre in the district, and the monthly price variation.

Prix de l'immobilier

Prix moyen / m2

Evolution mensuelle

Paris 1er

8074 €

0.94%

Paris 2eme

7004 €

1.43%

Paris 3eme

7647 €

0.73%

Paris 4eme

9227 €

1.52%

Paris 5eme

8139 €

1.89%

Paris 6eme

9646 €

1.06%

Paris 7eme

9077 €

-0.11%

Paris 8eme

7868 €

-0.87%

Paris 9eme

6578 €

1.54%

Paris 10eme

5897 €

1.63%

Paris 11eme

6175 €

1.94%

Paris 12eme

5941 €

0.54%

Paris 13eme

6060 €

1.88%

Paris 14eme

6685 €

1.18%

Paris 15eme

6666 €

0.5%

Paris 16eme

7437 €

-0.18%

Paris 17eme

6066 €

1.06%

Paris 18eme

5737 €

1.45%

Paris 19eme

5090 €

1.88%

Paris 20eme

5252 €

0.16%


info@frenchlawconsultancy.com

Wednesday 26 May 2010

France to get average speed cameras

Watch out, the fast, quiet autoroutes of France are going to be monitored by average speed cameras, as used in England, Germany, Norway and Italy. Don't panic just yet though, they are not scheduled to be introduced until the summer of 2011.
Source: www.leparticulier.fr

Friday 21 May 2010

Paris apartment prices up 12% since 2009

According to French Estate Agents MeilleursAgents.com the price of apartments for sale in Paris has increased by 12% year on year to the 1st May 2010.

The average price per square metre is for a Paris apartment is now 6730€, which in itself reveals an increase of 2.1% between 31 March 2010 and 30 April 2010.

The reasons for this increase are set out by property experts Immobilier-danger.com as being fourfold: Low Interest rates; safer investment that the volatile stock market; few properties on the market; and, as ever, location location location.

This property price increase is not mirrored throughout France as a whole, as French property prices generally have not increased dramatically. However, Paris and the classic desirable locations seem to be weather the storm, and remain as popular and as expensive as ever.

John Kitching, French Property lawyer
www.frenchlawconsultancy.com

Thursday 20 May 2010

Champs Elysées has gone green!

The young farmers have turned the Champs Elysées into a green agricultural zone for two days!
Have a look at the pictures and videos on the bbc website
http://news.bbc.co.uk/1/hi/world/europe/10143393.stm

There is also an interesting article on how the French wine industry is struggling due to the recession in Britain and the relatively weak pound driving up import costs. Britian is the biggest importer of French wine in the world... http://news.bbc.co.uk/1/hi/world/europe/7969564.stm

Eco Renault may face court action over name

An interesting French news article on the bbc website reports that Renault's new Zero Emission car (ZoE) may face court action over plans to name it Zoe. Parisian Zoe Renault, who has no link to the car maker, has sought legal advice to prevent the car giant from using her name for the vehicle. She claims that it would cause distress to hear phrases such as "Zoe Renault has broken down". Other women named Zoe, one of the most popular recent French names, are also signing a petition against Renault using the name.

Wednesday 19 May 2010

Thinking of selling? Act quickly before taxes go up

It is widely expected that the rate of UK capital gains tax is set to rise when the new coalition government announces its emergency budget. It is thought that any tax rises will come into force from April 2011, although that may be optimistic. Capital gains tax is currently at 18%, and it is expected that it will rise to mirror income tax rates which are 20% for lower rate tax payers and 40% for higher rate tax payers, with a possible 50% band for those earning over £150,000 per annum.

Please remember that gains on French property must usually be declared in the UK as well as in France. Capital gains tax paid in France can generally be offset against UK capital gains tax to avoid paying the same tax twice. It is worth pointing out that even where a French property is exempt from French capital gains tax, it is likely to be subject to UK capital gains tax for UK tax residents.

If you are considering selling your French property, it may be prudent to consider starting the ball rolling sooner rather than later before any tax rises, and ensure that you seek advice regarding mitigating the capital gains tax. Remember: do not sign an estate agent's agreement or sale contracts without getting them checked.

The Times has given five top tips to reduce your UK capital gains tax, click here.

Monday 17 May 2010

French Property VAT - new rules on land and new builds

Further to the post below regarding the new French Property VAT rules with effect as of 11.3.2010, we have prepared the table below to make sense of the rule change. The table applies to a non VAT registered Vendor selling French property or land.

Where Vendor is not registered for French VAT:

Type of land

where Purchaser is VAT registered

where Purchaser is not VAT registered

Non Building Land (Terrain NAB)

Outside the scope of VAT regs

Purchase tax applies at 5.09%

Exceptions:

art 1594-0 G: agreement to build = no purchase tax;

art 1115 agreement to sell on

= 0.715% purchase tax)

Outside the scope of VAT regs

Purchase tax applies at 5.09%

Building Land (TAB)

Outside the scope of VAT regs

Purchase tax applies at 5.09%

Exceptions:

art 1594-0 G: agreement to build = no purchase tax;

art 1115 agreement to sell on

= 0.715% purchase tax)

Outside the scope of VAT regs

Purchase tax applies at 5.09%

New property

If the vendor had previously purchased as a building to construct, then VAT is charged on the whole sale price (257-I-3-b 1) and 0.715% purchase tax applies (art 1594 F)

If the vendor had NOT previously purchased as a building to construct (eg it was already built) then it is outside the scope of VAT regs and purchase tax applies at 5.09% (or at 0.715% if an agreement to sell on was in place)

If the vendor had previously purchased as a building to construct, then VAT is charged on the whole sale price (257-I-3-b 1) and 0.715% purchase tax applies (art 1594 F)

If the vendor had NOT previously purchased as a building to construct (eg it was already built) then it is outside the scope of VAT regs and purchase tax applies at 5.09%

Building other than new property

Outside the scope of VAT regs

Purchase tax applies at 5.09%

Exceptions:

art 1594-0 G: agreement to build = no purchase tax;

art 1115 agreement to sell on

= 0.715% purchase tax)

Outside the scope of VAT regs

Purchase tax applies at 5.09%


based on a table from the French Tax Office website official bulletin, the best format is on the Le Particulier website available here

NB new build buildings which are sold within 5 years of the building completion date are subject to VAT.
The situation for existing buildings remains unchanged (i.e. outside the scope of VAT)

French Property prices 2010 forecast

French Property Prices 2010

The Paris Chamber of Notaires is expecting to see prices and volume of sales in the most desirable parts of Paris to gradually increase throughout the rest of 2010, and whilst some other select areas will also expect the same results, such as Nice, Lyon, Toulouse and Bordeaux, the rest of France will have to wait until 2011 for a similar positive trend.

French property prices stable, but volume down

The Paris Chamber notes that prices in France haven’t dropped dramatically over the past two years, and in a lot of areas they have simply stagnated, although volume of sales has decreased dramatically.

French new build property - surprising growth

The new build market has been unusually active, although this is in part due to the various fiscal incentives that had been made available to French tax residents, such as the Loi Scellier, and it is thought that many people will have entered into these schemes without fully computing the pros and cons, and may have been better off avoiding the scheme.

Friday 14 May 2010

New VAT and Notaire rates on plots and new builds

France has been forced to bring its VAT rates back in line with European Union requirements, which will particularly impact building plots and new builds built within the last 5 years. This is expected to cause prices of building plots to increase and will also have an effect on Notaire fees and registration taxes on sales of New Builds. There is widespread confusion concerning VAT on new builds sold within 5 years, and much will depend upon whether the buyer and or seller is an individual, a property professional, whether they are VAT registered. The deed of sale determines the relevant date, rather than it being the date of the initial contract (compromis de vente), and under the new rules, the planning authority description of the land will determine whether it is is building land or not, rather that it depending upon the intention of the purchaser. Each case will be determined on its own merits, and should be discussed with a Notaire. Please contact info@frenchlawconsultancy if you require further information.

The Pound heads towards 1.20 € / £

Despite our unique political circumstances, the pound has been steadily creeping towards the elusive rate of 1.20 €/£. Throughout the recession, many experts had been predicting that we would achieve this rate by the end of the year for the last two years, although it does now seem to be approaching reality. Whether this will be a long term rate or not will remain to be seen. Currency dealers are expecting this rate to trigger a lot of forward contracts of currency purchases, and therefore may see a sudden boost to French property purchases...which may also trigger sales, and act as a wider catalyst to the French property market.

To track the currency rate, here are some currency dealer websites: www.smartcurrency.com www.hifx.co.uk