For many years, France has been one of the most popular countries for German real estate buyers. Whether it’s a vacation home on the Atlantic Coast, a condominium in Paris, or a second home in Provence, the selection is vast, and for many, the dream of owning a property in this neighboring country is within reach.
However, anyone looking to buy real estate in France should be aware that the purchasing process differs from that in Germany in several key ways. In particular, many buyers are initially unaware of the importance of the preliminary contract, the role of the notary, and certain tax and inheritance law specifics.
Thorough preparation helps you avoid risks and ensure that your real estate purchase in France is handled in a legally sound manner. Below, you’ll learn what you should pay special attention to when buying a house or apartment in France.
Buying Real Estate in France as a German Citizen: Are There Any Restrictions?
Many prospective buyers wonder whether they, as German citizens, can simply buy real estate in France. In principle, the answer is yes. German citizens can purchase both a house and an apartment in France without having to prove residency in France or obtain special permits.
Whether you intend to use the property as a vacation home, second home, retirement home, or investment generally does not affect the purchase. As a result, many Germans choose to buy a house in France or purchase a condominium in popular regions such as Provence, the Côte d’Azur, or Alsace.
Nevertheless, buying real estate in France differs in some respects from the purchasing process in Germany. In particular, the importance of the preliminary contract, the role of the notary, and certain tax and inheritance law considerations are often underestimated by German buyers. Anyone wishing to buy real estate in France should therefore familiarize themselves with the legal framework early on to avoid surprises later on.
Our Alaris attorneys specializing in real estate and contract law are well-versed in all key aspects of buying and selling real estate in France. Contact us today!
The Process of Buying Real Estate in France
Anyone wishing to buy real estate in France should be aware that the purchase process differs from that in Germany in one key respect. While in Germany it is usually the notarized purchase agreement that creates the decisive legal obligation, the preliminary agreement plays a significantly greater role in France.
Once an agreement has been reached on the purchase price, a preliminary contract is signed first. This is usually a “compromis de vente” or a “promesse de vente.” The essential terms of the real estate purchase are already set forth in this document. For both the buyer and the seller, this step is therefore much more than a mere reservation of the property.
After the preliminary contract is signed, the phase of legal and administrative reviews begins. Among other things, the notary verifies the ownership status, obtains the necessary documents, and checks whether there are any legal obstacles to the sale. It usually takes about two to four months until the final closing.
Only then is the notarized main contract, known as the “Acte Authentique,” signed. With this contract, ownership is officially transferred to the buyer. At the same time, the purchase price is paid and the keys are handed over.
Anyone looking to buy an apartment or a house in France should therefore pay close attention to the preliminary contract. Errors or unfavorable provisions in this early stage are often difficult to correct later on.
The Preliminary Contract: The Most Important Step in Buying Real Estate in France
Many German buyers are surprised to learn that it is not the final contract signed before a notary, but rather the preliminary contract, that represents the decisive step in purchasing real estate in France. For this reason, the contents of the preliminary contract should be carefully reviewed before signing.
Compromis de Vente & Promesse de Vente
In practice, two types of preliminary agreements are primarily used: the Compromis de Vente and the Promesse de Vente. Both serve to set forth the essential terms of the real estate purchase and pave the way for the subsequent main contract.
Compromis de Vente: The standard in everyday practice. Here, both parties are immediately and equally bound; the buyer commits to the purchase, and the seller commits to the sale.
Promesse de Vente: Common for land or luxury properties. In this case, only the seller is initially bound. In exchange for an option fee, the seller grants the buyer the exclusive right to purchase the property within a specified period—or to decline the purchase.
Regardless of the form chosen, buyers should carefully review all provisions, as important rights and obligations are already established at this stage.
The 10-Day Cancellation Period for Buyers
Upon receipt of the signed preliminary contract and the legally required documents, private buyers are generally entitled to a 10-day cancellation period. Within this period, the buyer may withdraw from the purchase without providing a reason.
Once the period has expired, however, withdrawing from the contract becomes significantly more difficult. Sellers are generally bound by the agreement even before that point. This makes it all the more important to have the preliminary contract carefully reviewed before signing it.
The Down Payment & Its Legal Consequences
Typically, a down payment is made after the preliminary contract is signed. This amount is often between five and ten percent of the agreed-upon purchase price. The money is not transferred directly to the seller but is deposited into a designated account held by the notary.
If the sale subsequently falls through without a legally recognized reason, the down payment may be forfeited in whole or in part. Buyers should therefore fully understand the conditions under which they can still withdraw from the contract at a later date.
Conditions Precedent as an Important Safeguard
So-called conditions precedent play a special role. They ensure that the purchase becomes effective only if certain conditions are actually met.
In practice, this often involves financing from a bank. In addition, regulatory approvals, planned construction projects, or potential preemptive rights may also be taken into account. Such provisions offer buyers additional security and should be tailored to the specific real estate project.
What documents should buyers be sure to review?
Before buying a property in France, you should not only carefully review the preliminary contract but also all available documents related to the property. These documents provide information about the condition of the property as well as any potential legal or technical risks.
Mandatory Technical Reports for the Property
When purchasing real estate in France, the seller is required to provide various technical reports. These are compiled into a document known as the Dossier de Diagnostic Technique (DDT) and are intended to provide buyers with a sound basis for making a decision.
The energy performance certificate deserves special attention. It provides information on the property’s energy efficiency and may indicate a potential need for renovation. In addition, depending on the age and location of the building, other inspections are required, such as those for asbestos, lead, the condition of electrical and gas systems, or potential natural and environmental risks.
Especially for older houses or condominiums, these reports can provide important information about future investments and maintenance costs.
Ownership Status & Encumbrances
In addition to the property’s physical condition, its legal status should also be reviewed. This includes, in particular, existing easements, rights of way, or other restrictions on use that could affect the property’s value or usability.
It is also advisable to verify whether structural alterations were properly approved and whether the actual use of the property complies with applicable regulations. A thorough review of these documents helps avoid unpleasant surprises after the purchase.
The Role of the Notary in Buying Real Estate in France
The notary plays a central role in the purchase of real estate in France. He oversees the transaction, drafts or reviews the contractual documents, and ensures that the transfer of ownership is legally valid. In addition, he verifies various legal requirements and handles the necessary registrations with the relevant authorities.
Many German buyers assume that a single notary represents both parties. In France, however, it is customary for the buyer and seller to each hire their own notary. This generally does not result in higher costs, as the statutory fees are split between the notaries involved.
Having your own notary can be particularly advantageous for buyers from Germany. This ensures that your own interests are taken into account and that any open questions can be clarified early on.
Notary fees should also be factored into your financial planning. For existing properties, these fees often amount to about seven to eight percent of the purchase price. For new construction, they are generally significantly lower. It is important to note that the majority of these costs consist of taxes and government levies. The notary’s actual fee accounts for only a comparatively small portion.
Taxes, Ongoing Expenses & Other Considerations
Anyone buying a house or apartment in France should consider more than just the purchase price and closing costs. Even after the purchase, ongoing tax obligations may arise that should be factored into your planning.
Property Tax & Residential Tax
Owners of real estate in France are generally required to pay the so-called Taxe Foncière. This is an annual property tax, the amount of which depends, among other factors, on the location and size of the property.
In addition, a Taxe d’Habitation may still apply to certain properties. While this tax has been abolished for many primary residences, it continues to be levied in numerous municipalities, particularly on second homes and vacation properties.
If individuals own real estate assets in France of significant value, the French real estate wealth tax may also apply. Whether a tax liability exists depends on the total value of the French real estate assets and should be assessed on a case-by-case basis.
Special Considerations Under Inheritance Law for German Property Owners
One aspect that is often overlooked when purchasing real estate in France concerns inheritance law. The rules governing inheritance differ in some cases significantly from the structures familiar in Germany. This can lead to unexpected consequences, particularly for married couples or families.
German citizens who purchase real estate in France and intend to hold it long-term should therefore have the potential impact of French regulations on future estate planning reviewed at an early stage. Timely planning can help avoid conflicts and undesirable outcomes down the line.
Purchase Possible Even Without Being Physically Present
Not every appointment related to a real estate purchase in France requires you to travel there in person. This can be a significant relief, especially for buyers from Germany, as it often eliminates the need for multiple trips to France.
In many cases, a power of attorney can be granted for the preliminary contract or the subsequent main contract. This authorizes a trusted individual or representative to sign the necessary documents on behalf of the buyer. The specific form this takes depends on the individual case and the notary’s requirements.
In addition, French notaries are increasingly using digital procedures. Under certain conditions, individual steps can now also be completed using secure remote signatures and digital identification procedures. This makes the purchasing process significantly more flexible, especially for foreign buyers.
Anyone wishing to purchase real estate in France should therefore discuss the available options with the relevant notary early on. This often allows the purchase to be organized efficiently without having to be physically present for every appointment.
Conclusion on Buying Real Estate in France: Review Carefully Before Signing the Preliminary Contract
Whether it’s a vacation home, a condominium, or an investment property, buying real estate in France is generally straightforward for German buyers. Nevertheless, the purchasing process differs from German law in several key respects.
The preliminary contract, in particular, deserves special attention. Important legal and financial decisions are made as early as this stage. The mandatory technical inspections, the review of potential encumbrances, and specific tax and inheritance law considerations should also not be underestimated.
Anyone wishing to buy a house or apartment in France should therefore allow sufficient time to review the documents and clarify legal questions early on. German-French legal advice, such as that provided by the law firm Alaris Law, can help identify risks and ensure the real estate purchase is prepared in a legally sound manner.