When buying a property in France there are a range of issues which require consideration.  The legal and fiscal regulations in France are as complex as those in the UK and we set  out here to broach some of the issues which are likely to concern you.

Structuring the sale

There are a range of options open to potential purchasers with regard to manner in which property is purchased.  One of the primary considerations, in making this decision, is that of succession.  Below are a few of the elements which may influence your decisions.

  • Under French law direct descendants and / or ascendants  are considered to be privileged with regard to succession and can not be cut out of  a will. This law relates to all immovable property held by the deceased and includes all children of the deceased even if they are the product of a previous marriage.

  • For anybody considered to be residing in France, their worldwide assets are considered to fall into their estate and would be dealt with under the French succession laws. The sole exception would be real estate held outside of France which would fall under the laws of the country where that property was held.

  • For anybody residing outside of France but owning a property in France, only assets in held in France would fall under the French succession laws.

Below are a few of the options open to a purchaser:

Purchasing in both names

If married:

  • If there are children and they are all descendents of the marriage then on the death of the first party the deceased's share would be split between his or her children and the surviving spouse.  The surviving spouse would have the choice of the usufruct of the property or 1/4 of the deceased's share.

  • If there are children from a previous marriage,  adopted children or illegitimate children,  then the spouse would not be able to make the choice of usufruct and would instead inherit 1/4 of the deceased's estate.

  • If there are no children the parents of the deceased would have a claim on the estate amounting to 1/4 each. The surviving spouse would inherit the balance.

  • In the case of principal residence the surviving spouse has
    the  right to live undisturbed in the property and have use of all the
    furnishings within.

If not married:

  • On the death of one or other party the deceased's share of the property will pass to his privileged inheritors and not to the other party. The inheritors would normally have the same rights over the property as the other party and can force a sale or co-habit the property.

There are a few ways of avoiding this problem. The property can be purchase using an SCI,(see below) or by the inclusion of a tontine clause at the time of purchase. Under this system the property would be inherited by the co-owner at the time of death of the other party. If the co-owner is not part of the family however,  inheritance tax could be as much as 60%. The privileged inheritors would effectively be disinherited by this process.

Communauté Universelle

  • This is a changing of the marital regime. Under this system the couple can decide to some extent how each part of their estate would be governed.  If they are resident outside of France, they can opt for including only the immovable property,  or their whole estate. The balance would then be governed by the laws of their country of residence. If they are resident in France the rule will apply to their entire estate. 

  • The property would then be held by the union of the married parties and on the death of the first spouse the property would be owned in total by the remaining spouse.  There are no death duties payable at this stage. However, if there are children from outside of the current marriage, they would be able to claim their share from the estate at the time of death. The children from the current marriage would only inherit their share after the death of the surviving spouse.

SCI - Société Civile Immobilière

  • This is a specific type of company set up with the purpose of owning immovable property. If the shareholders of the SCI are not resident in France the shares of the SCI are treated by law as movable property and would fall under the laws of their country of residence. This means that a will can be made to leave the shares to any party thus avoiding the laws which govern privileged inheritors in France.

Note : All information on these pages are set out and intended as a guideline only and should be verified with a notaire, advocate or lawyer should you wish to take any firm advice relating to any legal matter.

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