Selling Property in France Taxes Fees Tips And Surveys

It’s not just the asking price that needs to be taken into account when selling French real estate; there are also closing charges to think about. How much money should you set aside for the real estate agent’s and notaire’s fees? What repairs or surveys must be done by law? Will you have to pay capital gains tax on the sale of the property? In this article, we will discuss the various fees associated with selling a home in France.

 

Property Sales in France: What You Need to Know Before Listing Your Home in France

Before listing your home for sale, the first thing you should consider is whether or not it is in move-in-ready condition. This is of paramount importance when selling older homes that may require extensive repairs or renovations before being put on the market.

 

In France, sellers are required by law to disclose all material information about the property to the buyer (including so-called “vice caché,” or hidden defects that the seller is aware of) and to conduct the required diagnostic surveys, but there are no minimum legal requirements regarding the condition or livability of a property being sold (more on that below).

 

Maintenance and Alterations

There is no mandate that you fix up your home before putting it on the market, but if it’s in bad shape, you may kiss your chances of finding a buyer and getting a good offer goodbye. If major repairs are put off, the property’s appeal to purchasers may suffer and it may become impossible to sell.

 

As a result, you should calculate the prospective selling price of your home in light of the costs associated with making any necessary repairs. Increasing your home’s ‘Diagnostic de Performance Énergétique (DPE),’ the Energy Efficiency Rating given to it, may significantly boost its value, since energy efficiency is becoming an increasingly important concern for buyers. Currently, there are grants available to buyers who make renovations to their homes in order to increase the property’s energy efficiency rating; this is something you may want to check into before listing your home for sale.

 

Finally, keep in mind that any building works carried out on a property are guaranteed by the builder (i.e., you!) for ten years under French law, even if you intend to perform the modifications yourself in the hopes of saving money. So, before you start working, be sure you know what those are.

 

Research for Diagnosis

Before selling a home in France, all vendors are required by law to commission a battery of “diagnostic surveys,” or inspections, covering topics including gas, electricity, asbestos, wastewater drainage, termites, and more. The seller is responsible for paying for the inspections that go into your “Dossier de Diagnostic Technique (DDT)”.

 

Except for the “Diagnostic de Performance Énergétique (DPE),” which must be performed before putting your house on the market, diagnostic surveys are normally performed after an offer has been placed on the property and the compromis de vente has been signed.

 

These diagnostic surveys can be expensive, depending on a number of factors, including the business you use, the location of your property (costs vary greatly from area to region), and the sort of property you own (you should expect to pay more for a large rural property than a small city apartment, for example). While the average cost is closer to €200, these charges can go as high as €600 in some cases, so it’s important to search around for the best deal.

 

Costs Associated with Selling a French Home, Including Those of Real Estate Brokers and Lawyers

Whether you decide to sell your French property privately by marketing internationally or through an estate agent, you will need to hire a notaire to handle the legal aspects of the sale. The good news for sellers is that this charge is always paid by the buyer, even though it can be quite a considerable amount, often between 6% and 8% of the property sale price.

 

Buyers typically cover real estate agents’ commissions or fees, but it’s vital to have a thorough understanding of the terms of your contract (the mandat de vente’) with your agent. It is important that the’mandat de vente’ specify who is responsible for paying any honoraria or other costs associated with the sale. These costs can range from 6-10% of the property’s selling price, so knowing who’s responsible for what and the breakdown of the price difference is crucial.

 

Making a Decision on a Price for Your French Property

There has been a significant uptick in demand for homes across France, especially in rural areas, since the end of the pandemic. Since 2020, home prices have risen consistently in desirable locales, and with properties moving swiftly, it’s been the norm for them to sell for the full asking amount. Given these factors, it could be a good moment to maximise returns on investments and list a house for sale.

 

Setting a fair asking price for your home depends on a number of criteria, including the home’s condition, the neighborhood’s desirability, the property’s value in the current market, and the seller’s motivation to sell. Get your home appraised by at least three separate local real estate agents or notaires and do some market research on comparable homes before setting a price.

 

You should know that in France, real estate brokers are forbidden from charging clients for an estimate or assessment of a home. As long as you haven’t signed a “mandat de vente” (a contract obligating you to use a certain real estate agent), you are free to employ any agent you like or sell the property privately, even if the service is provided for free.

 

Selling a French Vacation Home Comes with Extra Fees and Taxes

Additional charges and duties may be involved when selling a second house in France, especially if the owner is not a French resident. Here are some of the most crucial expenses to think about.

 

Tax on Capital Gains

You must pay French capital gains tax when selling a French property if:

 

  • You are selling a residence other than your primary place of abode.
  • If you’ve just been the property’s owner for a relatively short amount of time (less than 22 years (or less than 30 years for the applicable social charges)
  • Those that sell real estate for more over €15,000
  • The total rate of taxation on capital gains in France is 36.2%, comprised of the 19.0% capital gains tax (impôt sur les plus values) and the 17.2% social charges (contributions sociales). There are discounts based on how long you’ve owned the property.

 

French capital gains tax and social charges are both required to be paid by non-residents, but the amount of the latter will vary depending on the taxpayer’s country of origin.

 

If you want to know more about the French capital gains tax, check out our other guides.

 

Selecting a Financial Ambassador

The sale of real estate in France necessitates the appointment of a tax representative if the seller does not reside in either the European Union or the European Economic Area. Sale prices above €150,000 are subject to this requirement, with few exclusions; generally speaking, if your property is subject to capital gains tax, you will also be required to appoint a fiscal representative.

 

For important transactions, a fiscal representative is needed in addition to a notaire, and unlike the notaire, the seller will be responsible for the representative’s fees. You may be required to pay a charge of anywhere from 0.4% to 1% of the property’s sale price, which will be subtracted from your net profit.

 

Change of Currency

It is just as important to consider currency conversion now, if you’re selling a French home from outside the EU and intend to swap your euros back into pound sterling, US dollars, or another currency, as it was when you bought the property in the first place.

 

The selling price of your home will need to account for the uncertainty of currency exchange rates and the necessity of deducting transfer costs. The speed with which you can convert your euros back into your home currency will, of course, depend on how quickly you need the money. However, the nature of selling a property may provide you a bit more freedom over the timescale. Could you, for instance, afford to let the money sit in your French bank account until a more favourable exchange rate became available if the currency exchange rate was less than favourable when you sold?

 

Before putting your home in France up for sale, we recommend getting in touch with a currency broker such as our partners at Moneycorp or Hawk FX. They will be able to explain the various methods available to safeguard against fluctuating exchange rates and minimize associated transfer fees, potentially saving you hundreds of Euros when transferring funds from France.

 

Legal fees and costs of translation

Finally, as a non-native seller, you may choose to hire an English-speaking legal representation, consult a French law expert, or hire a tax advisor. The legal documents and contracts you will be required to sign will be written in French. You may find English-speaking experts in all of these fields listed in our FrenchEntrée directory; scheduling a visit with one is recommended before advertising your home for sale.

 

Have You Decided to Sell Your French Home?

Esales Property is here to help whether you decide to sell your French property on your own or with the assistance of an estate agent, whether you have questions about the legal process or capital gains tax, or whether you simply want to refresh your knowledge of the buying and selling process in France. The first place to look is at our guides.

 

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