Why do you need us - FAQs

Q. I have had a beer with the Vendor in the local bar.  I wrote on a postcard the address of the property, the price, and signed it.  He took the card from me and smiled.  Am I bound?

A. No.

Q. Yesterday the Estate Agent bounced me into signing a Contract and hassled me into paying a deposit.  Upon thinking about it on the ferry home, I have changed my mind.  Can I get out of it?

A. Yes, because you must be given seven days notice to cancel.

Q. I have signed a Contract and paid the deposit.  The Contract says that the Vendor pays the Estate Agent's commission.  I have decided I want to go to Spain instead.  Get me out of it.

A. You will lose the deposit.  Even though the Contract says that the Vendor pays the Estate Agent's commission, you will have to pay it.  Furthermore you may well have to pay some money to the French Notary if you have messed him about.  So pulling out will be expensive.

Q. I quite like the property but I am not sure.  Can I keep my options open by putting in a subject to mortgage clause.  I will tell the bank to issue a letter of refusal if I decide I do not want to go ahead.

A. French law has got that gambit sorted.  Don't try it.  If you do you are on to a loser, meaning that you will lose your deposit.

Q. Somebody has suddenly claimed a right of way across my front lawn, although it was not mentioned in the title deeds.  He says that it has been used by himself, his father and his grandfather for well over 100 years.

A. Since the right of way is not in the title deeds, your neighbour's claim will fail.  Long usage does not suffice.

Q. There is an open rainwater drain across my property from my neighbour's property.  It is not mentioned in the title deeds.  It has been in use for more than thirty years.  I am fed up with it.  Can I force my neighbour to put in a drain across his own property directly to the public sewer.

A. No.  Long usage of more than thirty years is sufficient in this case for your neighbour to maintain his rights.  The fact that the open water drain is not mentioned in the title deeds does not matter.

Q. Do I need a building permission to put in a swimming pool?

A. You need a simplified permission called a declaration of works at the Town Hall.

Q. Can you explain POS, COS and SHON.  This stuff is too much for me.

POS = Plan d'occupation des sols = land development plan.

COS = Coefficient d'occupation des sols = the maximum permitted constructible surface area expressed as a coefficient per square metre of land owned.

SHON = Surface hors oeuvre nette = the constructible surface area of all floors, measured from outside the walls, less uninhabitable attic space, uninhabitable basement space, garage space and terraces.

Q.  I am buying a property consisting of 40 hectares (approximately 100 acres).  This is more land that I need.  So I propose to let half of it out to a local farmer at a peppercorn rent.  Is this OK?

A.  The peppercorn rent will have the result that the farmer can keep the land for his lifetime and his son for his lifetime after that.  The same applies if you allow the farmer to give you an occasional bottle of wine or to hand you a few cabbages.  You must not accept any rent at all.

Q.  What is an SCI?

A.  SCI = Société Civile Immobilière  = Civil Real-Estate Company.  It is like a UK company in that it is a legal person.  It is like a UK partnership in that the liability of the members is unlimited.

Q.  Do I need an SCI?

A. If you are one person or one couple buying one house, almost certainly no.  In other circumstances, we can advise you on your particular situation.

Q.  I should like to buy a hotel in France.  What legal structure should I adopt?

A.  Amongst other possibilities, it would be classic and normal in France for the real-estate to be held by an SCI [see above] and for the business to be run by a private French company called a Société à Responsabilité Limitée or SARL for short.

Q. I am fed up with my builder.  I consider that he has done a shoddy job and has overcharged me by € 300.  Please deal with this.

A. We do not do this sort of work.

Q. Last year, I bought a place for a song.   I now want to sell it at three times the price.

A. You will not be allowed to do this until you have waited two years from the date when you purchased.

Q. Last year, I bought an old ruin.  I have done it up totally, and now I want to sell it at three times what I paid for it.

A. You will be allowed to do this provided that you have kept all the contractor invoices.   You will not pay French capital gains tax if the contractor invoices fill the difference between the price you paid and the price you are now asking, but you will have to pay VAT at 19.6 % on the re-sale price because the Tax Administration will consider that you are now selling a new building.

Q. I have a child by a previous relationship whom I have not seen for twenty years and whom I detest.  Can I stop him getting anything when I die?

A. The basic answer of French law is no, but there may be solutions depending on your circumstances.

Q. Last year I bought a property at a price of € 500,000.  I want to leave it to my partner when I die.  We are not married.  I do not have any children.  My parents have died.

A. Your partner will pay French inheritance tax at 60 % because you are not married.

Q. Can I go and live in France, not pay any French income tax, and claim  principal private residence exemption from French capital gains tax on a resale?

A. No.   You cannot say in the same breath that you do not reside in France and that you do.

Q.  I would like to live in France permanently and to go on paying income tax in the UK.  I do not want to be bothered with French taxes.

A.  Under the double tax treaty between the UK and France, if you are fiscally resident in France, you must pay French income tax on all of your movable assets worldwide.

Q.  Well then, what are the criteria for being fiscally resident in France?

A.  We can advise you on this on a case by case basis.

Q. I want to let the property commercially throughout the summer.  I do not want to pay any income tax in France.

A. Under the double tax treaty, you must pay French income tax on the French rental income.  You deduct the tax paid in France from your UK charge to UK income tax on the same income.

Q. I should like to own my French property through a company established in the Channel Islands.  It will be a subsidiary of a company in Panama, which in turn will be a subsidiary of a company in the Cayman Islands.   Please set it all up.

A. This is most inadvisable and if you go ahead with this, you will be paying  special French taxes through the nose.

Q. I should like some trustees to hold a French property on behalf of my children.  Please set it up.

A. Although French law is probably going to budge on this issue over the next ten years, it is still the case that French law does not recognize trusts.  If a trustee dies, his children will take the property, not your children.  If a trustee hands over the property to your children when they turn eighteen, French gifts tax will be chargeable at 60 %, because this will be a transfer between strangers in blood.  In France, keep clear of trusts.

Q.  I want to employ someone in France from England and I do not want to pay any French Social Security contributions.  How about that?

A.  Quite a lot of people are still getting away with it, but the French are cracking down on it.