Lack of urban planning compliance (building permit):

A risk that is often underestimated is the discovery, by the buyer or notary, of work carried out without authorization or not in accordance with the permits obtained. For example, a house extension, the transformation of an attic into living space, the addition of a swimming pool or a veranda without prior declaration, etc. If the property has such irregularities, the sale may be compromised or the buyer may demand guarantees. It is therefore crucial to anticipate: carry out an audit of the history of the property. Check that all the work carried out has been subject to the required planning authorisations and that a certificate of conformity has been issued by the town hall, if applicable. In the absence of a certificate (for old works), it is possible to request a retrospective regularisation (regularisation permit) or to provide all the information to the buyer in advance. Do not conceal this information: any intentional concealment can be qualified as fraud and lead to the cancellation of the sale or damages in favour of the buyer. It is better to play fair, even if it means negotiating a price reduction or having the upgrades carried out before the sale. A lawyer will be able to advise you on whether to reveal or regularise a particular point. Note that some minor non-conformities (for example, a fence a little higher than allowed) do not prevent the sale, but must still be reported in the deed to avoid future remedies. In addition, if there is a risk of pre-emption by the municipality (urban project areas), the notary will take care of it by requesting the certificate of absence of pre-emption. Obtaining this certificate is a legal condition: failure to issue it within the deadline would render the sale null and void. It is therefore a point to watch out for (the notary usually does it automatically).

Lack of mandatory technical diagnostics:

As mentioned, the seller must provide a  complete Technical Diagnosis File (DDT) (lead, asbestos, termites, DPE, electricity, gas, sanitation, natural risks, dry rot, noise, public buildings, etc. as the case may be). The absence of a diagnosis when signing the deed exposes the seller to serious consequences. On the one hand, he will not be able to exempt himself from the warranty against latent defects corresponding. This means that if a problem covered by a missing diagnosis is discovered after the sale (for example, presence of asbestos, lead, termites, dangerous gas installation), the buyer may turn against the seller, even if the latter was unaware of the problem, because the clause exonerating latent defects will be deemed unenforceable. On the other hand, the buyer could, in some cases, have the sale cancelled or obtain a reduction in the price if he demonstrates that the lack of information has prejudiced him. For example, the absence of Carrez Law footage (in co-ownership) allows the buyer to request a reduction in the price proportional to the surface area error discovered (action within 1 year). Similarly, the absence of a State of Risks and Pollution (ERP) or DPE can theoretically justify an action for nullity or a reduction in the price. Criminal sanctions are even provided for certain breaches (fines of up to €37,500 and one year in prison in the event of deliberate non-compliance with diagnostic obligations, although prosecutions are rare). Solution: Have all the diagnostics carried out by certified professionals even before they are put on sale. This way, if a problem is revealed, you will know about it as soon as the negotiations are held (and you can either remedy it, adjust your price, or fairly inform the buyer). Also check their validity dates (some are valid for 1 year, others 10 years). Append them to the compromise and the deed. This proactive approach protects you and inspires confidence in the buyer.

Latent defects and post-sale litigation:

A latent defect is a serious, non-apparent defect that precedes the sale, which renders the property unfit for its use or greatly reduces its value. The buyer has 2 years from the discovery to bring a warranty action. The private seller can be exempted from this warranty in the deed (which is the usual clause), unless he has acted in bad faith (if he knew of the defect). Despite this clause, as we have seen, it will not apply if a mandatory diagnosis is missing for this defect. Typical post-sales litigation includes: unstable foundations, concealed water infiltrations, undeclared pest infestation, etc. To avoid these problems: do not knowingly hide an important defect. If your home has a weak point (a roof to be redone, a questionable underpinning room), it is better to either repair it before the sale, or report it and sell it “as is” in complete transparency (which will allow the defect to be included in the price). Total transparency accompanied by a clause “the property is sold in the condition in which it is, the buyer acknowledges having gone through it completely with a professional…” will reduce the chances of litigation. In the event of a dispute, however, having provided all the information can protect the seller against an accusation of fraud. Fraud (fraudulent tactics to deceive the buyer) is even more serious: it can lead to the cancellation of the sale or to heavy damages if the buyer proves that the seller has deliberately concealed decisive information from him. Thus, avoiding fraud goes hand in hand with our recommendation: to communicate sincerely about the property.

Problems related to the occupants or the rental situation:

If the property is rented, there are specific rules to be respected: the tenant’s right of pre-emption (if the sale of an occupied dwelling is empty or sold in pieces), leave for sale given in the form (with 6 months’ notice before the end of the lease, offer to the tenant),  etc. Failure to follow these procedures makes the sale challengeable. A non-resident must therefore ensure that he or she has issued the notice correctly or informs the buyer of the presence of a tenant (the sale will then be occupied). If it is a rented main residence, the existing tenant has a right of first refusal over any other offer. Another point: if it is a second home and the seller has lent it to a third party or if an occupant without right or title is there, the situation must be regularized before the sale. A buyer will not agree to acquire a property without the guarantee of peaceful enjoyment. The notary will in any case require a sworn statement from the seller indicating whether there is a tenant or not, and the conditions.

Unresolved tax and administrative issues:

A risk that is often ignored is that of  the seller’s tax debts in France. Of course, capital gains tax will be levied, but the seller must also have paid, for example, the property tax until the day of the sale. In principle, the deed provides for a pro rata temporis and sometimes a clause for the escrow of part of the price to pay the property tax when the due date arrives (in the autumn). If the seller owes other taxes in France (for example, if he had previously undeclared rental income), the tax authorities could possibly register a legal hypothec. It is therefore advisable to be up to date with your French tax obligations. In addition, since 2021, the French tax authorities may ask non-residents for a certificate of non-taxation (or certificate of tax regularity) before releasing the funds abroad, especially if the seller leaves France leaving arrears. Check with your non-resident tax office to make sure there are no outstanding notices. The notary also checks that there is no opposition from the Treasury (Article 244 of the French Tax Code) before paying the price.

Errors or delays in formalities:

Finally, a very concrete risk is a delay in the provision of a document or the completion of a formality, which can delay the sale or even cause the deal to fail if the buyer becomes impatient. For example, in a co-ownership, you must obtain a dated statement (accounting document of charges) from the property manager – a delay or a refusal by the property manager can be problematic. The notary takes care of this, but it is better to authorize him to do so quickly. Similarly, if the seller has lost a warranty document (e.g. the ten-year warranty of a recent extension) or a certificate of inspection (individual sanitation), the time to reproduce it can be long. The precaution is to  prepare a complete file as soon as the offer is accepted, with the help of the notary and/or the lawyer, to gather everything that is necessary. This avoids extensions of time and penalties for late payment.

 

In summary

The risks for a seller are often due to forgetfulness or lack of information. The golden rule is to be proactive and transparent: provide all the required legal documents, inform about the defects of the property, and regularize as much as possible before the sale. The support of professionals (notary, lawyer, real estate agent) makes it possible to cover all these points of vigilance. For a non-resident, even if the distance makes it more difficult to manage, these details should not be neglected: a one-off trip to France to settle an administrative problem can avoid a costly dispute later. By avoiding these pitfalls, the sale will be made serenely, without fear that a claim will disturb the achievement of your wealth objectives.

 

Conclusion: The sale of a property in France by a non-resident is an operation involving a specific legal and tax environment. By following the formal steps (from the mandate to the authentic deed) seriously, by taking the appropriate precautions (tax representative, declarations, powers of attorney, etc.), by optimizing if possible via legal strategies (company, donation, dismemberment) adapted to your situation, and by surrounding yourself with a competent team (notary, specialized lawyer), the non-resident seller will be able to carry out this transaction in complete security. French law offers a protective but demanding framework: it is necessary to comply strictly with it to avoid pitfalls and get the most out of your real estate investment in France. An expatriate or wise investor will thus be able  to secure his real estate divestment while minimizing costs and risks, in order to fully enjoy the proceeds of the sale.

Ownership of the property via a company (SCI):

Many foreign investors choose to acquire and hold their French property via a Société Civile Immobilière (SCI). In terms of sale, selling the property from an SCI can have several indirect advantages. Firstly, if several people or members of a family own a property together, the SCI facilitates the management and resale (it is simpler to transfer shares or organise the transfer to the heirs). In terms of capital gains tax, a transparent SCI  (subject to income tax) does not provide an immediate tax advantage: the capital gain is calculated and taxed as if the partners were selling directly, at a rate of 19% (if partners are natural persons) and with the same allowances for the duration of the company. The fact of being a non-resident does not worsen the rate thanks to the alignment made in 2015. In other words, there is no overtaxation solely because of the SCI or the foreign status. On the other hand, holding via an SCI can allow you to choose to be subject to corporate income tax (CIT), if you are an option. In this case, the capital gains regime is that of professionals: there is no longer an allowance for duration, but the capital gain (or the result of disposal) is subject to corporate income tax at the rate of 25% (in 2025) on the net accounting capital gain. This option is generally only interesting in specific schemes, because at the CIT the taxable base can be increased by the depreciation applied to the property and the taxation does not disappear over time (unlike the exemption after 22/30 years for individuals). Nevertheless, a company with corporate income tax could allow  the proceeds of the sale to be reinvested in another real estate project by avoiding immediate taxation at the personal level (the company keeps the net corporate income tax funds, and the partner will only be taxed if he distributes a dividend or in the event of a withdrawal of funds). For a non-resident investor who plans to pass on the property to his or her children, the SCI also offers advantages: the possibility of gradually giving away shares (which can be tax-optimised thanks to the allowances on gifts every 15 years, by splitting the value). In short, the primary purpose of creating an SCI is not to reduce the tax on the capital gain of the sale, but it is a legal tool that facilitates management and transmission. From a purely tax point of view on the sale, it should be noted that an SCI not subject to corporate income tax does not penalise the non-resident seller (taxation at 19% identical to a direct holding), while an SCI subject to corporate income tax may, in certain cases, allow a tax deferral strategy (at the cost of the loss of allowances for duration). Any decision to hold a company must be carefully considered with advice (notary or tax lawyer), depending on the value of the property, the time horizon of ownership and family objectives.

Donation of the property before sale:

The gift before sale is a classic strategy for “purging” the unrealised capital gain. It consists of the owner giving the property to a relative (usually an heir: child, grandchild, etc.) then that the beneficiary of the gift makes the sale to the final buyer. The tax advantage lies in the fact that the gift does not entail taxation on the capital gain (since there is no sale for consideration, the transfer is free of charge) and that the beneficiary (donee) will be deemed to have acquired the property at market value on the day of the gift. Thus, when the donee resells, the taxable capital gain will be calculated in relation to the value of the property at the time of the donation, and not in relation to the initial acquisition price of the donor. If the sale takes place shortly after the gift and at the same price as the value declared in the deed of gift, the capital gain will be very low or even zero, thus avoiding the 19% tax (+ social security contributions). Example: a non-resident bought an apartment for €200,000 20 years ago, he can sell it for €500,000 today (unrealised capital gain €300,000). If he sells directly, his taxable capital gain after allowances will still be significant (20 years of ownership ≈ 60% of income tax allowance, so taxation on ~€120,000, i.e. ~€23,000 of tax + 17.2% of PS on ~€210,000 remaining, etc.). If he decides instead to give the property to his two children before the sale, valuing it at €500,000 in the deed of gift (real market value), no capital gain is due by the father. The children become owners and can sell for €500,000 without capital gain (€500,000 – €500,000 base = 0). As a result, capital gains tax is saved. However, several precautions and costs must be considered:

• • The gift itself can trigger gift tax if it exceeds the legal allowances (€100,000 per parent and per child every 15 years, for example). In our example, €500,000 to two children = €250,000 each, so after deduction of €100,000, there is still €150,000 taxable for each, resulting in about €30,000 in rights per child (on the scale of 2025). In total ~€60,000 in gift tax. Admittedly, this is less than the ~€23,000 in capital gains tax + ~€36,000 in PS that the father would have paid (total ~€59,000), but the saving is small here. If the property was held for a short time (i.e. a large taxable capital gain) and/or if the gift allowances are sufficient to cover the value, the operation is much more advantageous.
  • The gift must not be made on the condition of resale or for the indirect benefit of the former owner, otherwise the tax authorities could reclassify the transaction as a taxable direct sale. This is called a “donation-transfer” arrangement. Legally, to be valid, the gift must be irrevocable and made before signing a commitment with a buyer. In practice, the risk of reclassification is eliminated if the gift is made without the property being under a firm promise of sale. Timing is crucial: for example, you can receive an offer to purchase, but it is better to sign the donation before concluding a sales agreement with the final buyer.
  • The donor must accept that he or she will not receive the sale price directly: it is the children (donees) who will receive the proceeds of the sale, since they have become owners in the meantime. However, it is possible to optimize the use of these funds as a family (the children can help financially afterwards, but be careful not to violate the spirit of the donation).
  • Despite these constraints, the gift before sale is a powerful and legal tool  for tax optimization on capital gains, which is very popular in wealth planning. According to notaries, this is a “surprisingly effective strategy for purging latent capital gains” according to a report by the Congress of Notaries of France (2016). The key is to calculate the net gain, taking into account any gift tax and costs (deed of gift, etc.), and to check that it is consistent with the family objectives. For a non-resident, it will also be necessary to consider the tax law of his country of residence (some countries tax gifts received or have rules for remittance of funds after sale).

Dismemberment of ownership (usufruct/bare ownership):

Dismemberment consists of splitting full ownership into bare ownership (holding the substance of the property) and usufruct (right of use and to receive income). It is first and foremost a lever for estate optimisation (for example, giving the bare ownership of a property to one’s children while retaining the life usufruct makes it possible to reduce the taxable base of gifts and to transfer the property at a lower tax cost). Regarding the sale of a dismembered property, several strategies exist:

• If the non-resident seller dismembered the property before the sale (for example, he or she donated the bare ownership to his or her children a few years earlier, keeping the usufruct), the sale of the property requires the joint participation of the usufructuary and the bare owners. For tax purposes, the capital gain is calculated by dividing the sale price between the usufruct and the bare ownership, according to their respective value on the day of the sale, and comparing it with the acquisition values of each fraction. Each party (usufructuary and bare owner) is taxed on its share of the gain. The tax authorities consider that the purchase price of each right corresponds to the value that was used when the dismemberment was set up. Thus, if the usufruct has been retained by the parent (donor) and the bare ownership has been transferred, the values appearing in the deed of gift will be referred to to determine the taxable gain of each person. This can be complex, but often interesting: part of the overall capital gain may have already been purged at the time of the gift (as seen above) since the bare ownership transferred has a more recent base value. In addition, the starting point of the holding period is taken on the date of entry into possession of each right (e.g. the bare owner calculates his allowance for the period since the gift). This configuration, although advanced, shows that dismemberment and early donation can combine their effects to reduce taxation.

 

• A seller may also consider partially selling the property in dismemberment. For example, an elderly owner wishing to optimize can sell the bare ownership of the property to an investor, while retaining the life usufruct. He thus immediately obtains a sum of money (the price of the bare ownership, which is a fraction of the total price of the property according to his age: the younger he is, the more the bare ownership is worth, since the life usufruct has a lower value; at the age of 70 the usufruct is worth 30% of the property, so the bare ownership ≈70% of the total value). The taxable capital gain will then be calculated solely on the price of the bare ownership transferred, which is lower than the price of full ownership, which reduces the immediate tax by the same amount. The usufructuary will not be taxed on the operation (he has not sold anything). Upon his death, the usufruct will be extinguished and the bare owner will become the full owner without tax (the extinction of the usufruct is not a taxable event in itself). This arrangement is similar to a form of life annuity without annuity or dismemberment-transfer. Please note: it must be financially balanced (the price of the bare ownership must correspond to the tax scales or a realistic economic value) in order not to be reclassified. In addition, the seller definitively renounces any share of the property for his heirs, since the buyer will eventually recover full ownership. It is therefore a strategy with a rather patrimonial aim (ensuring capital during one’s lifetime) and fiscal (reducing the taxable base).

 

• Finally, it should be noted that if a property has been held in dismemberment (e.g. inheritance where the surviving spouse has the usufruct and the children the bare ownership, then they sell jointly), the notary will be able to apply the appropriate tax regime. This is not a priori optimization, but it is good to know that the law has provided for these cases to avoid double taxation.

 

Summary on tax optimization:

A non-resident has legal levers to reduce the tax on the sale, but each option must be handled with care. The SCI is above all a management and transmission tool, to be considered only if it brings a civil gain (it does not reduce the capital gain itself to the income tax, except for the choice of the corporate tax which has other counterparts). The gift before sale can drastically reduce or cancel the taxable capital gain by raising the acquisition value to the current value, possibly at the cost of gift tax and family planning. Dismemberment can be integrated into the strategy (transferring the bare ownership in advance, or selling only part of the rights) to fragment the tax base. These arrangements require expert advice (notary or tax lawyer) in order to measure all the legal, tax and financial effects, including with regard to the tax authorities of the country of residence. Anticipation is key: it is often too late to optimize when you are already engaged in sales, hence the importance of consulting a professional beforehand.

Calculation of the taxable capital gain:

The real estate capital gain is the difference between the sale price and the purchase price (plus acquisition costs and eligible works). The calculation method for a non-resident is identical to that for a resident: the seller can thus deduct from the sale price the notary fees and transfer taxes that he paid at the time of purchase (flat rate of 7.5% of the purchase price if the actual detail is not justified), as well as the construction, renovation or improvement work that he has financed (either for their actual amount on receipts,  i.e. a flat rate of 15% of the purchase price if the property has been held for more than 5 years, even without invoices). After calculating the gross capital gain, any allowances for the holding period apply  : from the 6th year of ownership, the seller benefits from a progressive allowance each year on the gross capital gain, leading to a total exemption from income tax after 22 years and social security contributions after 30 years. In 2025, the allowance is broken down as follows: 6% per year between the 6th and 21st year, then 4% in the 22nd year (which is 100% over 22 years) for income tax, and 1.65% per year from the 6th to the 21st year, 1.60% in the 22nd, then 9% per year from the 23rd to the 30th year (100% at 30 years) for social security contributions. In practice, a non-resident who sells a property that has been held for, for example, 10 years will benefit from the same allowances as a French person to calculate his taxable capital gain.

Capital gains tax rate:

Once the net capital gain has been calculated, the applicable tax rate depends on the tax status of the seller (natural or legal person). For a non-resident natural person, the tax rate on real estate capital gains is 19%, regardless of their country of residence. This flat rate, aligned with that of residents, has applied uniformly since 2015 (previously, non-EU residents were taxed at 33.33% but this difference has been removed to ensure equal treatment). The 19% deduction made at the time of the sale is dischargeable: the seller has no other tax to pay on this gain in France or to declare it afterwards. As a reminder, this rate applies after any allowances, which greatly reduces the tax burden in the event of long holdings. It should be noted that if the seller is a  non-resident legal entity (e.g. a foreign company directly owning the property), the tax rate differs: capital companies (for corporate income tax) are subject to a levy of 25% (corporate income tax rate in 2025) or 33.33% depending on the case, while transparent partnerships (e.g. SCI not subject to corporate tax) are taxed in the name of the partners. In the case of an SCI owned by non-resident natural persons, the Conseil d’État confirmed that it is subject to the 19% rate on the capital gain, regardless of the country of residence of its partners (in practice, taxation is made in the name of each partner on his or her share of the gain, via form 2048-IMM).

Social security contributions:

In addition to capital gains tax, France applies social security contributions on the capital gains of real estate of individuals. Their overall rate is 17.2% (CSG, CRDS, solidarity levy, etc.) for French tax residents. For non-residents, the situation has changed in recent years. Since a ruling by the CJEU and legislative changes, non-residents affiliated to a social security scheme of an EU/EEA country or Switzerland are no longer subject to the CSG and CRDS on their real estate income in France. They remain liable for a solidarity levy  of 7.5%. In other words, a seller residing in an EU country (or Switzerland) will pay 7.5% in social security contributions on his capital gain, instead of 17.2%. On the other hand, sellers residing outside the EEA (e.g. in the United States, Asia, etc.) remain subject to full social security contributions at the rate of 17.2%. These deductions are also deducted by the notary at the time of the sale, at the same time as the 19% tax. They do not give rise to a refund even if the seller’s country of residence has its own social protection, because it is legally a sui generis tax (in particular the solidarity levy). However, there is one notable exception: if the non-resident is affiliated to a European social security scheme, he or she will be able to claim the refund of the CSG/CRDS share (9.2%+0.5%) unduly deducted, even if there was only 7.5% solidarity left to be paid – this mechanism is now normally taken into account directly at the time of the sale.

Surtax on high capital gains:

France applies an additional tax on net real estate capital gains  exceeding €50,000 (this surcharge concerns the portion of the real estate gain that is taxable, after allowances for duration, excluding building land). It is calculated by bracket: 2% from €50,000 to €100,000 of capital gain, 3% up to €150,000, 4% up to €200,000, 5% up to €250,000 and 6% above €260,000 (with a sliding scale allowance mechanism at the start of the bracket). This tax applies to non-residents as well as residents, in addition to the 19% + social security contributions, and is also retained by the notary when. For example, for a net taxable capital gain of €300,000, the surcharge would be around 6% of €300,000 = €18,000. The seller must take this into account in its net gain calculations.

Exemptions and special tax regimes:

In addition to the general exemption after 30 years of ownership, there are specific measures from which a non-resident may benefit:

• • “Former residents” exemption (Article 150 U II-2° of the French Tax Code): This is a measure intended to favour expatriates who sell their former residence in France. It allows a non-resident to benefit from an exemption from capital gains tax, up to a limit of €150,000 of net capital gain, when selling a home in France. To be eligible, several conditions must be met:  (1) the seller must be a national of the EU, Iceland, Norway, or Liechtenstein (note that the United Kingdom, since Brexit, is no longer included in this list, nor is a national of a country without an administrative assistance agreement); (2) the seller must have been a tax resident in France continuously for at least 2 years at a time prior to the sale (e.g. a French expatriate who lived and paid taxes in France for several years prior to his departure); (3) The transfer must take place no later than 31 December of the 10th year following the year in which France placement.meilleurtaux.com leaves for tax purposes. Beyond this 10-year period, the exemption is no longer granted, unless the property sold has remained at the disposal of the seller since his departure and has not been rented or occupied by third parties (in this case, there is no time limit to benefit from the exemption, which is intended to cover the case of a second home that the expatriate keeps for his use and that he sells more than 10 years after his departure). This exemption is limited to a single property per taxpayer and to €150,000 in capital gains. In concrete terms, if the capital gain realised exceeds €150,000, the fraction above that exceeds it remains taxable. The property sold must also have been the seller’s residence at some point in time (this arrangement is sometimes referred to as the “residence in France of non-residents” exemption). Please note: this exemption does not apply if the property is held via a company (SCI or other), the sale must be carried out directly by the natural person. A non-resident seller who meets these criteria will have an interest in providing the notary with the necessary supporting documents (residence permit in France, French tax notice for years of residence, etc.) to obtain this very advantageous partial exemption.
  • Other exemptions: Of course, certain exemptions under ordinary law also apply to non-residents. For example, the exemption for the sale of a property < €15,000 if it is an isolated sale (which is not common for an entire property, this threshold is more aimed at the sale of undivided shares or isolated parking lots); the exemption for elderly or disabled people with modest incomes (subject to very restrictive conditions of tax income and ownership,  this is a rare case for international investors); or exemption in the event of expropriation under certain conditions, etc. These cases remain marginal for a typical foreign investor, but they should be aware of.

Conclusion :

Ultimately, the standard tax regime for a non-resident who sells a property in France is as follows: 19% capital gains tax (after allowances for duration), + 17.2% social security contributions (unless reduced to 7.5% for EU/EEA/Swiss residents), + possible surcharge if there is a significant capital gain, all of which is deducted by the notary. This regime can be lightened by exemption schemes (30 years, expatriates <=10 years, etc.) or optimised by a good use of the rules (maximum deduction of work, etc.). To avoid any unpleasant surprises, a non-resident seller should have his unrealised capital gain estimated before the sale and to simulate the applicable tax, in order to include this tax cost in his calculation of the net proceeds of the sale.

Legal steps in selling real estate for a non-resident in France

Selling a property in France involves several key phases, similar for a resident or a non-resident, with some practical adjustments if the seller is abroad. The main legal steps are: the sales mandate, the preliminary sales agreement (or promise of sale) and the final deed of sale.

Mandate to sell (sale):

The seller can entrust a mandate to a professional (real estate agent or lawyer in real estate transaction) for the sale of his property. The mandate, whether exclusive or simple, authorises this agent to look for buyers and to negotiate on his behalf. The non-resident seller will have an interest in defining the conditions (minimum price, fees) and choosing a trusted agent who masters the seller’s language and understands his objectives. An attorney can, for example, legally secure the transaction while managing the marketing.

Preliminary sales agreement:

Once a buyer has been found and agreed on the price, a preliminary contract is signed. The most common is the sales agreement, which is firmly binding on both parties (synallagmatic promise). Under this contract, the seller undertakes to sell and the buyer to buy on the agreed terms, subject to any suspensive clauses (for example, the buyer obtaining a loan). A sum of about 5 to 10% of the price (security deposit or immobilization indemnity) is generally paid by the buyer when the agreement is signed. The preliminary agreement specifies the deadline for completing the final sale (often 2 to 3 months) and lists the mandatory documents attached (technical diagnostics, urban planning documents, etc.).

Important: after signing, the non-professional buyer benefits from a legal withdrawal period of 10 days during which he can renounce without penalty (SRU Law). After this period, if the conditions precedent are lifted, the sale becomes firm. In the event of an unjustified default by the buyer, the seller may retain the security deposit as compensation (unless otherwise stipulated).

Authentic deed of sale (final):

This is the final conclusion of the transaction, which must be received by a French notary. The authentic deed of sale is signed in person or by power of attorney by the seller and the buyer, usually before the notary of the buyer’s choice (the seller may, however, be assisted by his own notary, the two notaries sharing the fees at no additional cost). The notary, a public officer, prepared the deed in advance by gathering all the necessary documents: the seller’s title deed, civil status, urban planning documents, mortgage situation, technical diagnostics,  the municipality’s right of pre-emption, etc. On the day of signing, the notary reads the deed and verifies the identities, then collects payment of the price. The non-resident seller must ensure that he or she has provided an international bank account number for the transfer of funds (the sale being in euros, and if applicable, provide for the time required for conversion and transfer abroad). If the seller cannot be physically present, he or she should have provided for an  authentic power of attorney authorizing a third party (a notary’s clerk, for example) to sign on his or her behalf. This power of attorney must be drawn up either by a local notary and then apostilled, or via the France consulate in the country of residence. Once the deed has been signed and the price paid, the notary hands over the keys to the buyer, publishes the sale with the Land Registry Service and pays any creditors (for example, repayment of a mortgage from the seller). The seller then receives a  detailed sales account and, subsequently, a copy of the registered authentic deed.

Each step must be carried out rigorously. For a non-resident, remote coordination with the agent, lawyer and notary is essential. It is recommended to anticipate the specific formalities (power of attorney, certified translation of civil status documents if necessary, etc.) in order to avoid any delay in the sales schedule.

Specific precautions for the non-resident seller

Selling a property in France while residing abroad requires some additional precautions, particularly on the tax and administrative front, to comply with French obligations and secure the transaction.

Mandatory tax representation:

French law requires certain non-resident sellers to appoint an accredited tax representative who will be the intermediary with the tax authorities for the calculation and payment of capital gains tax. In practice, any non-resident who sells real estate in France must appoint such a representative, subject to exceptions for exemption.

The automatic exemption cases are: 1) the seller resides in an EU or EEA country that has an administrative assistance agreement with the France (e.g. a resident of the European Union, Iceland or Norway does not have this obligation); 2) the sale price is ≤ €150,000 per seller; 3) the sale is exempt from capital gains because of the length of time the property has been held (more than 22 years for income tax and 30 years for social security contributions). Apart from these situations, the seller must call on a tax representative before the sale: this can be a specialised company approved by the tax authorities, a bank in France, the buyer (if the latter is tax domiciled in France), or any other person domiciled in France and approved, excluding notaries and lawyers (who cannot be tax representatives themselves). In practice, notaries frequently collaborate with tax representation companies (such as SARF, TEVEA, etc.) to complete this formality. The tax representative is liable to the Treasury: he verifies the calculation of the taxable capital gain and guarantees the payment of the corresponding tax. Its fees (generally a few hundred euros, varying according to the complexity and the sale price) are paid by the seller. It is prudent to contact the tax representative as soon as the agreement is signed to prepare the file (collection of deductible work invoices, proof of the purchase price, etc.).

Reporting obligations and tax formalities:

Being a non-resident does not exempt you from filing tax returns related to the sale. On the day of the signing of the authentic deed, the notary (or the tax representative) draws up a real estate capital gains declaration (form 2048-IMM) in the name of the seller and pays the corresponding tax. This declaration must in principle be filed within one month of the placement.meilleurtaux.com transfer, but the intervention of the notary guarantees compliance with this legal deadline. If the capital gain realised is fully exempt (for example, property held for more than 30 years, or other reason for exemption), or if the sale price is less than €15,000, no capital gain declaration is required. On the other hand, in the event of a taxable capital gain, the deduction made by the notary is dischargeable: the non-resident seller does not have to report this capital gain on his annual French tax return. In other words, the tax is deducted at source at the time of the sale and definitively settles the tax due in France on this gain. However, all supporting documents should be kept in case the French tax authorities carry out an a posteriori audit (the tax representative also keeps a copy of the file).

In addition, depending on the seller’s country of tax residence and the applicable tax treaty, the seller will have to check whether he must declare this gain in his country and whether he will benefit from a tax credit equal to the French tax paid, in order to avoid double taxation. Most bilateral tax treaties follow the OECD model, which provides that capital gains on real estate are taxable in the country where the property is located, in this case the France, and that the country of residence eliminates double taxation (via a tax credit or exemption). Thus, a non-resident who has paid capital gains tax in France generally does not have any additional tax on this gain in his country, or can obtain a deduction equivalent to the French tax. It is recommended to consult a tax professional to ensure the specific treatment according to the country of residence.

Power of attorney and signing logistics:

As mentioned, if the seller cannot travel for the signing of the compromise or the final deed, he must anticipate the establishment of powers. A power of attorney for the compromise can usually be under private signature, but for the authentic deed, it must be authenticated (by a local notary + apostille, or made before a consul of France). Similarly, provide for the translation of legal documents if the seller is not French-speaking, in order to understand the exact content before signing or mandating someone. It is possible to ask the notary for a draft deed in advance and an unofficial translation if necessary.

Coordination of the transfer of funds:

A non-resident seller must inform the notary public of how he or she wishes to receive the proceeds of the sale. In general, the notary can transfer the funds to a foreign bank account (SEPA zone or non-SEPA). An IBAN/BIC must be provided and possibly additional information for transfers outside the euro area. Check with your foreign bank for any fees or delays. In the event of an exchange control in the country of residence, make sure that you have the repatriation formalities. In France, capital transfers are free but subject to anti-money laundering regulations: the notary will have to identify the beneficial owner of the funds and ensure the lawful origin of the funds (which, in the case of a sale, is obvious since the funds come from the buyer). For large amounts, an administrative transfer declaration is no longer required above a certain threshold but it remains prudent to be able to justify the receipt of large sums in your country (in particular with regard to your own tax authorities).

Personal documentation:

The non-resident seller must provide the notary with various civil and tax documents. For example, a copy of their passport, proof of address abroad, the marriage contract or matrimonial regime if applicable (to verify the spouse’s agreement if necessary), and their French tax identification number. If he does not have one (because he has never been taxed in France), the notary will be able to obtain one (form for non-residents) in order to register the capital gain. You will also have to provide the supporting documents related to the property: title deed (previous deed of purchase or inheritance), latest property tax notices and housing tax, and if it is a condominium dwelling, the documents relating to the co-ownership (co-ownership regulations, latest minutes of the general meeting, etc.). Preparing these elements well in advance facilitates the notary’s work and avoids delays.

In summary, the specific precautions of the non-resident consist mainly of complying with French tax obligations (tax representative, capital gains declaration) and anticipating the practical constraints of distance (mandating representatives to sign and receive the funds). With good support (notary, lawyer, tax representative) and meticulous preparation, a real estate sale in France can take place smoothly even from abroad.

Deadlines in Real Estate Sales

In a real estate sale, several deadlines must be respected for the transaction to proceed smoothly. The parties involved in the sale, namely the seller and the buyer, must therefore be attentive to these different deadlines to ensure that the sale proceeds smoothly and without any issues.

Reflection period for the seller

The seller has a 10-day reflection period from the signing of the sales agreement to retract. This period allows the seller to take time to reflect on the sale before committing definitively. They can cancel the sale without justification during this period.

Withdrawal period for the buyer

The buyer also has a 10-day withdrawal period from the signing of the sales agreement to retract. This period allows the buyer to withdraw from the sale without justification.

Suspensive condition realization deadline

In some cases, the sale is subject to a suspensive condition, such as obtaining a real estate loan. The deadline for fulfilling the suspensive condition is specified in the sales agreement. The parties, therefore, have a deadline to fulfill the suspensive condition before proceeding to the next step.

Signing deadline for the deed of sale

Once all the suspensive conditions have been fulfilled, the parties have a 2 to 3-month deadline to sign the deed of sale with the notary. This deadline may vary depending on the regions and notaries, but it is generally between 2 and 3 months.

 

The importance of deadlines in real estate sales

Respecting deadlines in real estate sales is essential for the transaction to proceed efficiently and avoid delays and disruptions. Failure to meet deadlines can have significant consequences for the parties involved.

For the seller, failing to meet deadlines can result in a delay in the sale of their property, which can have a significant financial impact. If the sale is delayed, it can also affect the seller’s planning, particularly if they have to move to another property.

For the buyer, failing to meet deadlines can also have significant financial consequences, particularly if they have to pay late penalties for fulfilling suspensive conditions. If the sale is delayed, it can also affect the buyer’s planning, particularly if they have to leave their current property at a specific date.

 

Consequences of not meeting deadlines in real estate sales

Failure to meet deadlines in real estate sales can have significant consequences for the parties involved. Here are some examples of possible consequences:

• If the seller fails to meet the reflection period deadline, the buyer can cancel the sale and request damages.
• If the buyer fails to meet the withdrawal period deadline, they may lose their right to withdraw and be required to purchase the property.
• If the suspensive condition is not fulfilled within the prescribed deadline, the parties may need to renegotiate the terms of the sale or cancel the sale altogether.

 

Conclusion

Deadlines in real estate sales are a crucial element for the success of the transaction. Respecting deadlines allows parties to complete the sale as quickly as possible and avoid delays and disruptions. Failure to meet deadlines can have significant consequences for the parties involved. Therefore, it is essential to understand the deadlines and respect them to ensure that the real estate sale proceeds without any issues.

 

Hire a real estate agent

Selling a property requires expertise, so it’s recommended to hire a professional real estate agent to guide you through the process. An agent can advise you on market prices, current trends, and the best strategies for selling your property.

Consult with a real estate attorney

If you have any doubts or questions during the sales process, it’s advisable to consult with a real estate attorney. They can provide legal advice on obligations, taxes, and help you draft the necessary contracts for the sale. They can also represent you in negotiations and in court if necessary.

Avoid overpricing

Overpricing your property can discourage potential buyers and negatively impact the value of your property in the market. It’s important to get a fair and accurate estimate with the help of a real estate professional and avoid following the highest bidder.

Don’t list with multiple agencies

While it’s recommended to hire a real estate agent, it’s crucial to avoid listing your property with multiple agencies. This can create suspicion among buyers, making them think there’s something wrong with the property and decreasing the chances of a successful sale. Listing your property exclusively with one agency presents it as a unique and high-quality asset, preserving its value in the market.

Check the quality of the property

Before selling your property, make sure it’s in good condition. Check the state of the equipment, installations, and coatings. If any repairs are needed, it’s better to carry them out before putting the property up for sale to avoid any problems during the transaction and to sell it at a more attractive price.

Be honest about the property’s condition

During the sale, it’s important to be honest about the property’s condition. If there are any defects or problems, it’s best to disclose them from the outset to avoid unpleasant surprises and to conclude the sale in complete transparency.

Verify ownership documents

Before selling your property, verify all ownership documents such as the title, house plans, building permits, and condominium documents. If you don’t have these documents, it’s important to obtain them before listing the property for sale.

Prepare for negotiation

Negotiation is a critical part of real estate sales. Prepare for negotiation by evaluating market prices and developing a negotiation strategy. Remember that negotiation is a process, so be open to discussion and willing to find a compromise.

 

Conclusion

Selling a property can be a complex and risky process. By hiring a real estate agent, consulting with an attorney, and following the tips mentioned above, you can avoid pitfalls and conclude a successful and safe real estate transaction. Remember that selling a property requires prudence and transparency, so take the time to prepare for the sale to maximize your chances of success and profitability.

 

What is the “Compromis de Vente” ?

The “Compromis de Vente”, also called “promesse synallagmatique de vente”, is a sales contract that binds the parties to sell and buy a property. It is signed after the acceptance of the purchase offer and before the signing of the final sales agreement with the notary. This document is very important because it defines the terms of the sale and binds the parties to comply with their obligations.

The content of the “Compromis de Vente”

The “Compromis de Vente” must include the following elements:

• The names, addresses, and personal information of the buyer and seller
• Description of the real estate property
• Sale price
• Payment terms
• Deadlines for payment of the price and signature of the final sales agreemen
• Suspensive clauses that allow cancellation of the sale if certain conditions are not met, such as obtaining a mortgage loan, absence of easements, joint ownership, or hidden defects
• Penalties incurred if either party fails to comply with its obligations
• Details on notary fees and real estate agent fees It is important to note that the “Compromis de Vente” is a legally binding document, which means that the parties are required to comply with the terms and conditions set out in the document.

Securing the “Compromis de Vente”

The signing of the “Compromis de Vente” is a crucial moment in a real estate transaction in France. In order to secure the “Compromis de Vente”, it may be wise to:

1. Seek the assistance of a specialized lawyer: It is recommended to consult a lawyer specialized in real estate law to accompany you in drafting and signing the “Compromis de Vente”. A lawyer can help you verify the legal validity of the document and inform you about the clauses to include to protect yourself.
2. Verify the condition of the real estate property: Before signing the “Compromis de Vente”, make sure of the condition of the real estate property by checking that there are no easements, joint ownership, or hidden defects. You can request a property inspection report to avoid any unpleasant surprises.
3. Respect the deadlines: The “Compromis de Vente” contains deadlines for payment of the price and signature of the final sales agreement. It is important to respect these deadlines to avoid any penalties or cancellation of the sale.
4. Ensure that you have the necessary funds: Before signing the “Compromis de Vente”, make sure that you have the necessary funds.
5. Suspensive clauses: Suspensive clauses protect the interests of both parties in case of unforeseen or undesirable situations that would prevent the sale from being concluded. They are therefore very important and must be carefully drafted. These clauses allow the sale to be conditional on the occurrence of a specific event, such as obtaining a mortgage loan or the non-existence of a mortgage on the real estate property. It is essential to list all the suspensive clauses in the “Compromis de Vente” to ensure that all parties are informed and committed. Suspensive clauses must also include a deadline for the occurrence of the event and a deadline for the lifting of the conditions.

The withdrawal period

Once the compromis de vente is signed by all parties, the buyer has a withdrawal period of 10 days, in accordance with French law. During this period, the buyer can change their mind without having to provide a specific reason. It is important that this period is respected in order to avoid any future complications.

 

Conclusion

The compromis de vente is a crucial step in the sale or purchase of real estate in France. It is a legally binding contract that must be taken very seriously. It is therefore important to fully understand the terms and conditions of the compromis de vente before signing it. To avoid any future complications, it is recommended to seek the assistance of a professional such as a lawyer to help draft the document and ensure that all aspects of the sale are properly covered.

What is the “Compromis de Vente” ?

The “Compromis de Vente”, also called “promesse synallagmatique de vente”, is a sales contract that binds the parties to sell and buy a property. It is signed after the acceptance of the purchase offer and before the signing of the final sales agreement with the notary. This document is very important because it defines the terms of the sale and binds the parties to comply with their obligations.

The content of the “Compromis de Vente”

The “Compromis de Vente” must include the following elements:

• The names, addresses, and personal information of the buyer and seller
• Description of the real estate property
• Sale price
• Payment terms
• Deadlines for payment of the price and signature of the final sales agreemen
• Suspensive clauses that allow cancellation of the sale if certain conditions are not met, such as obtaining a mortgage loan, absence of easements, joint ownership, or hidden defects
• Penalties incurred if either party fails to comply with its obligations
• Details on notary fees and real estate agent fees It is important to note that the “Compromis de Vente” is a legally binding document, which means that the parties are required to comply with the terms and conditions set out in the document.

Securing the “Compromis de Vente”

The signing of the “Compromis de Vente” is a crucial moment in a real estate transaction in France. In order to secure the “Compromis de Vente”, it may be wise to:

1. Seek the assistance of a specialized lawyer: It is recommended to consult a lawyer specialized in real estate law to accompany you in drafting and signing the “Compromis de Vente”. A lawyer can help you verify the legal validity of the document and inform you about the clauses to include to protect yourself.
2. Verify the condition of the real estate property: Before signing the “Compromis de Vente”, make sure of the condition of the real estate property by checking that there are no easements, joint ownership, or hidden defects. You can request a property inspection report to avoid any unpleasant surprises.
3. Respect the deadlines: The “Compromis de Vente” contains deadlines for payment of the price and signature of the final sales agreement. It is important to respect these deadlines to avoid any penalties or cancellation of the sale.
4. Ensure that you have the necessary funds: Before signing the “Compromis de Vente”, make sure that you have the necessary funds.
5. Suspensive clauses: Suspensive clauses protect the interests of both parties in case of unforeseen or undesirable situations that would prevent the sale from being concluded. They are therefore very important and must be carefully drafted. These clauses allow the sale to be conditional on the occurrence of a specific event, such as obtaining a mortgage loan or the non-existence of a mortgage on the real estate property. It is essential to list all the suspensive clauses in the “Compromis de Vente” to ensure that all parties are informed and committed. Suspensive clauses must also include a deadline for the occurrence of the event and a deadline for the lifting of the conditions.

The withdrawal period

Once the compromis de vente is signed by all parties, the buyer has a withdrawal period of 10 days, in accordance with French law. During this period, the buyer can change their mind without having to provide a specific reason. It is important that this period is respected in order to avoid any future complications.

 

Conclusion

The compromis de vente is a crucial step in the sale or purchase of real estate in France. It is a legally binding contract that must be taken very seriously. It is therefore important to fully understand the terms and conditions of the compromis de vente before signing it. To avoid any future complications, it is recommended to seek the assistance of a professional such as a lawyer to help draft the document and ensure that all aspects of the sale are properly covered.

Here are some tips to help you negotiate with potential buyers:

Be prepared: Before you start negotiating, make sure you are well-prepared. This means having all the relevant documents and information about your property ready, including its history, any renovation work that has been done, and any potential issues that might affect the value of the property.

Understand the market: In order to negotiate effectively, you need to have a good understanding of the current market for luxury properties in France. This means knowing what similar properties in the area are selling for, and how demand for properties like yours is currently trending.

Be flexible: Negotiating is all about finding a compromise that works for both parties. While you want to get the best possible price for your property, you also need to be willing to compromise on certain issues, such as closing dates or contingencies.

Don’t be afraid to counteroffer: When a potential buyer makes an offer, it’s important to remember that this is just the starting point for negotiations. Don’t be afraid to make a counteroffer if you feel the initial offer is too low, but also be prepared to explain why you think your property is worth the price you are asking.

Keep emotions in check: Negotiating can be a stressful process, but it’s important to keep your emotions in check. Getting upset or angry during negotiations can make it harder to find a compromise, and may even turn off potential buyers.

Work with a professional: Finally, it’s always a good idea to work with a professional real estate agent or lawyer who can help guide you through the negotiating process. They will have experience with similar transactions, and can help you navigate any potential issues that might arise.

 

Negotiating the sale of a luxury property in France requires careful planning, effective communication, and a willingness to be flexible. By taking the time to prepare for negotiations, understanding the needs and preferences of potential buyers, and working with experienced French real estate lawyers, you can increase your chances of achieving a successful sale at the best possible price. Whether you are selling a villa on the French Riviera, a chateau in the Loire Valley, or a historic property in Paris, following these tips can help you navigate the negotiation process with confidence and achieve your desired outcome. So stay calm, be patient, and trust in the expertise of your real estate lawyer to guide you through the sale of your luxury property in France.

 

Key points to consider when preparing and conducting a property visit to sell luxury French real estate:

 

Prepare the property: Before scheduling any visits, it’s important to ensure that the property is in good condition and well-maintained. This includes cleaning, decluttering, and making any necessary repairs or updates.

Set the stage: When conducting property visits, it’s important to create a welcoming atmosphere that allows potential buyers to envision themselves living in the space. This may involve setting the temperature to a comfortable level, playing soft music, and opening curtains or blinds to let in natural light.

Provide detailed information: Buyers will have many questions about the property, so it’s important to be prepared to provide detailed information about the home’s features, amenities, and history. This may include providing a list of recent upgrades or renovations, information about the property’s location and local amenities, and any relevant legal or financial information.

Emphasize the property’s unique selling points: In order to sell luxury French real estate, it’s important to emphasize the property’s unique selling points. This may include features such as high-end finishes, breathtaking views, or unique architectural details.

Be responsive to buyer questions and feedback: During the property visit, it’s important to be responsive to buyer questions and feedback. This includes answering questions about the property, responding to concerns or objections, and addressing any issues that arise during the visit.

Follow up with buyers: After the property visit, it’s important to follow up with potential buyers to gauge their interest and address any further questions or concerns they may have.

Work with a real estate professional: Selling luxury French real estate can be a complex process, so it’s important to work with a qualified real estate professional who can guide you through the process and help you achieve your goals. A real estate transaction lawyer can also be a valuable resource in navigating the legal aspects of selling a luxury property in France.

 

In conclusion, preparing for property visits is a crucial part of the sales process for luxury real estate in France. As real estate transaction lawyers, we strongly advise our foreigns clients to pay close attention to the preparation and execution of these visits, as they can make or break a sale. By following the steps outlined in this guide and enlisting the help of experienced professionals, such as a mandataire lawyer and a real estate agent, foreign sellers can feel confident in their ability to attract and impress potential buyers.