5 Tips for Successful Property Investment in France

France is a destination renowned for the beauty of its landscapes and the finesse of its culture. It has everything to seduce you. Whether you come to invest in France to:

• Settle down: make France your new home
• Have a second home: enjoy your property peacefully during weekends or vacations
• Obtain additional income through a rental investment

Roche & Cie, with more than 60 years of experience, offers you individualized solutions for your project:

• Pre-purchase study
• French tax return
• Accounting and management of rental income
• Management of real estate VAT
• Establishment of tax returns
• Tax on real estate wealth (IFI)
• Furnished rental and para-hotel scheme

By placing the client’s needs and desires as our core strategy, our team of experts will guide you through each step of your real estate project in order to help you determine the optimal solution. Investing becomes a real pleasure thanks to the right advice, at the right time and with the right person.

To properly purchase a property in France, the following steps must be followed

Step 1 : Offer to purchase

Step 2 : Signing the exchange of contracts (payment of 5 to 10% of the purchase price

Step 3 : 10 days cancellation period ; During the cancellation period, the purchase has the right to change her/his mind by annulling the purchase without paying any compensation. In addition, the purchaser is also liable for the notary fees and registration costs. The total represents about 7% of the purchase price.

Step 4 : Securing of a mortgage is required

Step 5 : +/- 2 months ; notarized signature of the deed of sale : in the presence of a notary, payment of the purchase price and handing over of keys.

In France, there are essentially two local taxes called “taxe d’habitation” (residence tax) and “taxe foncière” (property tax).

Property tax :

This tax is due each year by the owners of a built or unbuilt property (dwellings, industrial and commercial premises, land etc…). The property tax is calculated by the tax authorities in relation to the notional ‘cadastral’ rental value of the property and the rate determined by the local administration.

Residence tax :

This tax applies to all housing (principal and secondary residences) and all occupants (owners or tenants). This tax is calculated directly by the tax authorities in relation to the location of the occupant on 1st January of the tax year. The amount due is calculated by multiplying the net rental value of the real property by the tax rate determined by the regional authorities.

Real estate wealth tax (IFI “impôt sur la fortune immobilière” :

You are liable for the IFI* when the net value of your real estate wealth exceeds 1.3 million euros.

Taxable assets: All built and unbuilt properties (building land, agricultural land…), real estate assets, shares of real estate companies.

Principal/main residence: (If tax residence is in France), 30% allowance.

Under French law, the notion of fiscal residence is defined by Article 4B of the General Tax Code. Subject to the provisions of international agreements, you are considered to be domiciled in France for tax purposes if you meet at least one of the following criteria :

• Your home is in France : France is the country you and your family normally live
• France is your main place of residence : if you spend more than 183 days per year in France
• You carry out your professional activity in France : salaried or self-employed
• The center of your economic interests is in France : France is the country where your main investments are concentrated or where your business headquarters are located.

Obviously, we will be able to assist you on this point.

Thanks to technical expertise of our passionate team, our objective is to give you all the keys to help you achieve success:

• Comparison of the different tax schemes proposed by the French administration to guarantee you security and compliance with French law
• Assistance in completing your tax returns (income, wealth, etc.)
• Provision with accurate and constantly updated information
• Choice of the best legal structure according to your project (e.g.: making an investment with several people, as a family, etc.