Land Registry. This is kept centrally within each department, usually at the prefecture or county town. It is also kept locally but less frequently updated at the Mairie of each commune.
All land is divided into sections and then plots within a commune, each with a number. The cadastre gives the surface area and boundaries of each plot and the owner’s name is registered against that plot.
Any changes to the boundaries or division of plots, grouping together of plots must be notified to the cadastre officially by a
The cadastral plan is the land plan, the pictorial description of the plots of land. A copy of a certain section may be obtained, usually free, at the Mairie, or for a fee and more up to date at the central cadastre.
Note : The cadastre in many departments may now be consulted by notaires via the internet.
See Boundaries
CAISSE DES DÉPÔTS ET CONSIGNATIONS (CDC)
This is the central state bank in France. It is not a trading bank, but as its name suggests a central depository. The branches of the bank are the local public treasury
CAPITAL GAINS TAX
The French state applies capital gains tax on re-sale of property in a number of situations and at varying rates. Firstly, we must define in which situations CGT is due:
Sale of a secondary home by a resident or non-resident.
Sale of a principal home where part of the property has been rented out.
Sale of a property owned by a trading company (such as a UK limited company)
Let's look at these one at a time.
1a) Sale of a secondary home by a resident in France.
By resident, we mean a French citizen fiscally domiciled in France or a foreigner who lives in France and declares his income at the local tax office (this is the official qualification for a resident since the abolition of residence permits for Europeans) or who has a long term visa (eg an American living here)
A resident who sells his secondary home is liable to CGT on the profit made. The profit is defined as
Net sale price minus (original purchase price + costs of acte de vente + estate agents fees + allowable renovation costs).
This profit figure is depreciated by 10% for each full year of ownership from year 6 to 15. At the end of 15 years, there is no CGT liability as the profit has been depreciated to zero.
The current (January 2009) capital gains tax rate is 16% plus 12.1% social security costs
1b) The sale of a secondary home by a non-resident.
A European citizen, non-resident in France is liable to the same CGT calculation as above, except that the tax rate is only 16% (social security costs not being recoverable from non-residents)
However, there are additional costs and bureaucracy for non-residents. The declaration is made by an accredited agent (a sort of government licenced risk assessor) usually appointed by the notaire for all sales over 150 000€. This agent goes through all building work invoices very carefully, refusing any that are even slightly suspect. He calculates the CGT payable. The vendor pays him approximately 1% of the net sale price for this privilege (deductible from the capital gain of course). In addition, if a considerable amount of building costs have been offset against CGT, the accredited agent may insist on retaining a sum of money on deposit from the sale proceeds (interest payable 1% per year) equivalent to the CGT which might have been due on those works, for a period of 3 years plus current year.
A non-European person, non-resident in France, is liable to the same CGT calculation as in 1b) except that the tax rate is 33.33%. An accredited agent is also appointed.
2) Sale of a principal home in France where part of the property has been rented out
A good example of this is where the resident owner also has a separate gîte which he lets for holidays, or where a part of the main house has been used exclusively for B&B.
CGT is due on the profit of the part of the property which has been used to create income.
The value of this part is calculated in discussion with the notaire, by estimating its value at purchase, the costs incurred in any renovation, offsetting any depreciation and then taking this away from the estimated net sale value of this part within the overall sale.
Tax rates are applied as above for residents.
Sale of a limited company owned property.
Such properties are always deemed to be secondary homes for capital gains purposes whether they are secondary or not. Not only is CGT always liable, but the rules for company owned properties are stringent and quite penalising. It is advisable to consult a taxation specialist before entering into the purchase of a property via a company for this reason. Whilst not going into specific details because of the complexity of the situation, let me just tell you that instead of depreciating over time of ownership, capital gains liability actually increases by 2% of the property value for each year of ownership by a company. Yes, this means that 100% of the property sale value is liable to capital gains tax after 50 years of ownership. Worth thinking twice before such a purchase. These rules do not apply to SCIs.
There is legal precedent which means that currently, Limited companies based outside France and owning property in France are not strictly liable to capital gains tax. However, and it is a big however....virtually no Notaire will attempt to register a sale deed for such a property without an acreddited agent being appointed, and such agent will insist on capital gains tax being paid !! In addition, this legal precedent has created a "grey" area, which is likely to be clarified very shortly so that Limited companies are once again clearly liable to capital gains tax.
In addition, know that a company that owns a property in France must make an income tax declaration on that property each year before 15th May (form 2746) and pay income tax on that income. If no income, no tax. However, for companies whose registered offices are outside of the list of countries with which France has a taxation treaty, not only is CGT a major issue, but a tax of 3% of the value of the property is payable annually.
When is there no liability to Capital Gains Tax?
If you are resident in France then you are not normally liable to CGT on the sale of your principal residence. Your principal residence is at the address to which the tax authorities send your annual income tax declaration.
If you have been a tax resident in France for at least two years, then moved away overseas before selling your home in France, the sale of this and a previous principal residence will be free of CGT provided 5 years passes between their sales. See your notaire.
CAPRICORN BEETLE
Most old properties in France have been attacked by wood insects at some time or another and their traces can be seen in the house timbers. The larva of the capricorn beetle loves nice old soft building timbers and it bores its way through them leaving behind the typical oval shaped hole on the surface as witness of its passage. The holes are about 5 mm in diameter and the larvae themselves are soft grubs up to 2 cm long. Their hard jaws do the damage by eating the timbers and a major attack can be quite destructive particularly in modern soft woods if left untreated.
How do you know if you have a problem? Well, you can hear them munching at quite a distance and that’s when its time to call in a wood treatment specialist.
Carl’s tips :
Do not be alarmed purely by the number of holes you can see in roof timbers, these are often old and inactive traces.
Do call in a wood treatment specialist if you start seeing piles of sawdust under a beam or hear the larvae munching in the night (I’m not joking). They will give you a free survey and quote.
Do not try and treat them yourself as timbers need to be injected with insecticide to get rid of them, and the insecticides are dangerous.
Do beware of people who knock on your door and offer you a free wood survey. More often than not they will try to frighten you into possibly unnecessary treatment at a high price.
CARTE
There are many types of professional cards or licences guaranteeing that the holder has the correct qualifications for the service they offer. Here are just a few that you may come across:
Carte Professionel d’Agent Immobilier
This is held by qualified estate agents who are registered at the local chamber of commerce. It is renewed annually and it is your guarantee that you are dealing with a bona fide estate agent. Ask to see it.
Carte Professionel de Négociateur Immobilier
This is held by any employee of an estate agency who undertakes the job of helping you find and buy a property. This licence is renewed annually. Again ask to see it.
Carte Grise
This is the registration document of the car and it is issued by the service des cartes grises at the prefecture when you buy a car or motorcycle. The carte is registered in your name.
If you bring a foreign car into the country and wish to keep it here, you must put it through a formal technical test and then obtain a carte grise before obtaining French number plates.To do this, start at the Prefecture and they will guide you.
Carte Bancaire
Most cards issued by the high street banks here are debit cards backed by the likes of MasterCard and Visa. They are the most common form of payment for goods and services here. They are not cheque guarantee cards (if you write a cheque without provision you will get yourself into trouble).
What is a Carte Blue? This is a generic term left over from the time when the banks all issued a blue coloured Visa card.
Carte de Séjour
Residence Permit. No longer required by European nationals living in France. However a Carte de Séjour must still be obtained for any other national wishing to reside more than 3 months in France. Application is made either via the French consulate in your own country or direct to the prefecture in the department you wish to reside in.
Carte Vitale
This is a green card issued to all who are entitled to health cover under the social security system. It contains your details, and if used at doctor’s or pharmacy allows you to be automatically reimbursed your health care costs. If you pay into the healthcare system via the Caisse Primaire d’Assurance Maladie, or similar organisation, you will be issued with this card.
CAVE (à vins)
A wine cellar. In rural France most caves are found at ground floor level with the living accommodation over them. A cave may be the coolest room in the house usually in the back to the north.
In town you will see Cave du Pin or similar over wine shop doors.
CERTIFICAT D’ URBANISME (CU)
There are 2 sorts :
1)
2) For a determinded operation
If you are buying a building plot, the notaire must obtain a CU confirming the planning status, limits and limitations of construction on the plot.
CELLIER
Store room or larder
CENTIARE
A unit of measurement of land area. One centiare is one square metre. There are 100 centiares in an are (100m2) and 100 ares in a hectare (10 000 m2)
CHANGE OF MARRIAGE REGIME
When a foreign married couple buys a property in France, either as secondary or principal home, they may change their marriage regime to best adapt their fiscal status to the conditions within France. This adaptation can be very important as the regime of marriage dictates the conditions of inheritance of built property in France. This adaptation is allowed by the Treaty of the Hague 1978, Article 6, lines 2 and 3.
Most of you reading this will now be scratching your heads, because you did not realise that you had a marriage regime to change. Well, you do and in the UK the normal regime is known as
When is a change of marriage regime useful to you? See Universal Community of Goods.
CHAMBRE D’HOTE See Bed and Breakfast
CHÂTEAU
Literally this means castle. Most old urban settlements in France still have a château or the remnants of a fortified position that protected that settlement.
The word château is also used to denote any grand house or property. More particularly in the wine producing areas of France, virtually every vineyard responds to the name of a château, and this may apply to the most noble of proper castles or the most humble abode which is the wine producer’s home.
The château d’eau , the water castle, is the water tower, an omnipresent feature of rural France supplying villages with water under pressure.
CHEMIN
This means a lane or track, a vehicular access way that is less important than a route or road. There are many different types.
Chemin communal : the small roads within a commune, serving local access to houses.
eg C107
Chemin vicinal : a lesser version of the above. eg CV103
Chemin rural ; This is the most abundant form of chemin. There is a network of chemins ruraux or farm tracks across the countryside. Usually about 3m wide and made of beaten earth, these were created to allow farmers access to their fields with horse and cart. These are owned by the commune and are open to all who wish to use them. A good many have fallen into disuse and are covered in brambles, as the communes may not have the funds to upkeep them and farm machinery is now too big to use them.
Carl’s tips :
If you are buying a property with more than a large garden, it is quite likely that you will have a chemin rural crossing it or providing access to your house. Look at the cadastral plan and you will see it shown as a narrow track, bounded by solid lines, and without a cadastral plan number but often a name like Chemin de Montaigu à Pervillac.
Do not be alarmed by the presence of a chemin rural on your land, it is quite normal here.
If you are worried about the proximity of a chemin rural to your house and potential disturbance, do enquire as to its use. Troublesome tracks may sometimes either be bought from the commune and made private or deviated with the agreement of commune and neighbours.
Do not put a locked gate on a chemin rural.
CHEMINÉE
Fireplace. Not to be confused with chimney which is a conduite de cheminée . This term usually denotes an open fireplace and they come in all shapes and sizes and materials. A cheminée insert is an enclosed wood burning stove with glass front fitted into the mouth of the fireplace.
CHEQUE BOOK
When you open a current checking account
Writing a cheque in France is much the same as anywhere else but always write in the name of the town where you write the cheque (à..... place, le..... date). No cheque guarantee card required but don’t overdraw without prior arrangement otherwise, a) the bank will fine you, and b) close your account if you persist.
CHILDREN
Your children are reserved inheritors of your estate in France. There are various ways of adapting the law to suit your individual situation and depending on whether you are resident or non resident.
See Inheritance
Carl’s tips
France is a very civilized and peaceful country, and the relationship between children and adults is one of trust. When you are introduced to a child, they will invariably come up to you and present a cheek. Do not stick out your hand awkwardly. You are in France and a peck on each cheek is the proper response.
CODE CIVIL
Unlike many countries, France has a written civil code
. This is a large red bound book, which you will find on the desks of most notaires and solicitors, within which you will find rules of conduct on just about any issue in day to day life in France. Rules regarding party walls, to rent reviews, to marriage requirements etc. It covers all aspects of the citizen’s life.
COMMUNAUTÉ DE BIENS
Community of goods. The legal marriage regime in France. See Marriage Regime.
COMPANY
For a variety of reasons, but in relatively rare situations you may decide to purchase your property via a company rather than as an individual. Typical reasons for such a choice are :
a complicated family situation
desire to significantly alter the inheritance situation
desire to exclude a child or children from inheritance rights
multiple purchasers eg. joint ownership between several people
purely financial reasons eg it is an investment property
Purchase via a company allows the application of different regulations regarding inheritance taxation, domicile, code of conduct in case of sale etc. It does this by changing the status of the built property from immeuble (regulated by French inheritance laws) to meuble or shares (regulated by different company/national laws). The main company types used for house purchase are the UK limited company, or other country equivalent or the French SCI .
The French fiscal authorities do not recognise trusts. Offshore companies are penalised.
Carl’s tips :
A company purchase is a rare thing, to be used in exceptional circumstances only.
Do not just look at the positive aspects (freedom to dictate inheritance rules) but beware the many negative aspects. Companies that own properties do not benefit from the variety of capital gains taxation offsets that are available to individuals and SCIs.
This is a complex subject and you should take specialist French financial advice before embarking on such a project.
If you own a property via a UK or similar limited company you must declare any income or zero income from the property before 15 May each year on form number 2746. If you do not, the tax authorities will apply an annual tax equivalent to 3% of the value of the property.
Companies registered in countries where France does not have a taxation treaty will automatically be charged this 3% annual tax.
If in doubt consult your notaire.
COMMISSION
When you are purchasing a property in France via an estate agent or even directly through a notaire you will be paying a commission on the purchase. The amount of commission payable and by whom it is payable is stated in the purchase contract right from the beginning, and is determined by the agent’s or notaire’s tariff and the type of sale mandate in force. At the end of the day one way or another the buyer will be paying the published total price, which is the net vendor price plus commission.
Agency commission rates are set freely by each agency and must be displayed on a notice in the office. Normal rates, on a sliding scale depending on house price, vary between 5% and 8% plus TVA. Currently VAT is 19.6%.
Carl’s tips :
Do check that the notaire has split out the agency commission in the preliminary purchase contract and put it in your charge so that you do not pay state taxation on this sum.
Do not pay the commission or the deposit directly to the estate agent. Although many agents are authorised to take clients funds, I personally do not recommend it, and advise you to pay all your funds via the notaire.
If you get in touch with and buy direct from a vendor obviously no commission is payable, but you will still need to seek advice or deal carefully and directly with the notaire.
On re-sale, the commission you paid on the purchase can be offset against any capital gains tax due.
CONSTAT PARASITAIRE
When you purchase a property, the first contract you sign will be accompanied by a wood insect report on the house and outbuildings, less than 6 months old and paid for by the vendor.
See Termites.
CONTRACT
There are various types of house purchase contract, the main ones being:
Sous seing privé or compromis de vente.
The most common name for the preliminary contract of purchase between individuals and conducted via a notaire. This is a binding contract subject to the conditions and suspensive clauses that are detailed within it. Once signed the notaire undertakes its administration and confirms all important conditions : planning, title, mortgage status etc. The process takes a minimum of two months in rural areas and four to six weeks in urban areas.
See example Appendix 1.
Promesse de Vente
The vendor offers a property for sale and gives an option to a buyer for , say, 2 months.
The vendor cannot accept any other offers during this period.
The buyer places a holding deposit of around 10%
At the end of the option, the buyer either takes up the option and buys, or declines to proceed. If he declines because a suspensive clause was not met, then he gets his “deposit” back….if not the vendor keeps it.
Promesse d ‘Achat
Uncommonly used, this is similar to the promesse de vente but in favour of the vendor.
Acte de Vente or Acte Authentique
This is the completion act of sale, raised by the Notaire for signature by the parties, only when he is satisfied that all conditions have been met for a secure and fair contract and also only when he has received all the purchase funds!
Unless otherwise stated in this contract the buyer may take full vacant possession of the property as soon as all parties have signed.
See example Appendix 1.
Location/Vente
In certain circumstances you may agree to a long term purchase contract on a property by which you agree to a monthly rent, over a defined period with a final lump sum at the end when you finally become the owner. This contract is usually used by real estate professionals.
Vente en Rente Viager
A rarely used contract by which you agree to purchase a property from someone by an initial lump sum followed by a monthly payment for the rest of the vendor’s life. The respective amounts are calculated actuarially by the notaire, depending upon the vendor’s sex, age and whether they will remain in occupancy of the property or not. It is a somewhat ghoulish form of contract in my opinion and rather unsatisfactory for one or both parties.
Jeanne Calment sold her property to her own notaire via rente viager. She lived to be 109 and her notaire and his successors continued to pay her monthly rental for all those years. Need I say more about the risks involved?
COOLING OFF PERIOD
When you sign the preliminary contract of purchase, there will be a cooling-off period within it for the buyer. This clause states that once the buyer has been presented a fully signed copy of the contract by the notaire, he has 7 days to reflect starting the morning after the day of receipt of the copy. This is a consumer protection clause. Within this period, the buyer may decide to withdraw from the contract, without any penalty and without losing the deposit. To withdraw, the buyer must write to the notaire by registered letter. No reason is required, but giving one will be of help to the vendor and agent.
Carl’s tips :
Do not sign a contract to purchase if you have the slightest doubt, thinking that you can always use the cooling-off period to re-consider. This wastes everyone’s time and effort.
If in doubt, discuss with your agent and notaire.
The vendor does not have a cooling off period, and is bound from the moment of signature.
CO PROPRIÉTÉ
If you are buying a flat, you are likely to be buying within a co propriété. This means that you buy the freehold of the flat, but pay monthly maintenance charges for elevators, new roof, re painting, porter salary etc
See A flat in Paris.
