The sales process
A different process
To begin with, you must be aware that the French sales process differs significantly from the Swedish one. It usually takes longer. Many sellers are often very optimistic about the price, which always reduces the possibilities in the short term. Therefore, it is very important not to start with an unrealistic price level from the start. Today, almost all marketing is done via the Internet, which requires an extra professional description of the object.
This is how it works
- All ownership rights are always transferred via a French notary. Most often it is the seller who chooses the notary, many times the same notary is used who handled the sale at the last change of ownership. The notary is neutral and can provide advice in many respects at no extra cost.
A sales contract is drawn up either by a notary or by a broker. The chosen broker must be authorised in France. He or she may not market the property until the seller has signed the contract. The broker is often granted exclusive rights to the assignment for a period of time. Once that period has expired, it is quite common for French people in particular to hire additional brokers in order to, it is hoped, speed up the sale. - The sales contract contains several terms and conditions that are important for the sale, such as prices and commission terms. These agreements are always written in French. It is important that the seller
– ensures that a technical survey is carried out by an independent consultant (engineer) who determines, among other things, the living space, heating requirements, etc.
– produces documents from the time of purchase
– provides information about the association, its costs, and housing taxes
– informs about any decisions regarding renovations in the property, displays board minutes
3. As soon as the sales process has started and buyers appear, it is normal for bidding to take place, usually slightly below the asking price. A written offer, called an "offre d'achat", is requested. Note that parallel bidding does not often occur as in Sweden, i.e. multiple buyers are allowed to bid.
After an agreement is reached, a preliminary agreement called a “compromis de vente” is written, which includes many important points. These agreements are strongly governed by laws and regulations and are in French. Both legal paragraphs and special conditions for the agreement are found here. It should be noted that the seller’s signature is binding, while the buyer has the right to break the agreement after the stipulated “cooling off period”, currently 10 days.
4. The formal takeover takes place when a final agreement (acte authentique de vente) is signed at the notary 2-3 months later.
In connection with this, the buyer makes the final payment. The notary also ensures that all fees and taxes are settled.
5. If the property is your main residence, no capital gains tax is payable. If it is not a primary residence, the tax is currently 35.5% on the capital gains.
Deductions may be made for renovations, among other things. The capital gain decreases by 2% per year after the fifth year of ownership until the 17th year of ownership and then by 4% per year from the 18th year of ownership until the 25th year of ownership and by 8% per year from the 26th year of ownership until the 30th year of ownership. This means that after 30 years of ownership there is no capital gain to tax.