{"id":2348,"date":"2024-06-14T19:10:53","date_gmt":"2024-06-14T19:10:53","guid":{"rendered":"https:\/\/hypotheekenbuitenland.nl\/cost-of-acquisition-and-ongoing-costs-france\/"},"modified":"2024-06-14T19:40:07","modified_gmt":"2024-06-14T19:40:07","slug":"cost-of-acquisition-and-ongoing-costs-france","status":"publish","type":"page","link":"https:\/\/hypotheekenbuitenland.nl\/en\/france\/cost-of-acquisition-and-ongoing-costs-france\/","title":{"rendered":"Cost of acquisition and ongoing costs France"},"content":{"rendered":"

Cost of acquisition and ongoing costs France<\/h1><\/div><\/div><\/div><\/div><\/div>
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Cost of acquisition and ongoing costs France<\/h2><\/div>
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The “buyer’s fees” (also known as “notary fees”) generally include the total costs due in taxes and notary fees. These costs are twofold: one part the costs related to the purchase of the property and the second part related to the notarization of the mortgage. When buying existing construction, the rule of thumb that the total cost is about 7.5% cost is quite accurate. Please contact Mortgage & Abroad if you would like a detailed calculation of the cost of buyer.<\/p>\n

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<\/i><\/i><\/span>Cost of buyer existing construction<\/span><\/a><\/h4><\/div>
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Transfer tax and departmental stamp duty are payable when purchasing existing construction. In addition, the buyer pays the notary’s fee for his services. The size of both elements are fixed in France. There are (marginal) regional differences in the size of departmental stamp duties.<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>Cost of buyer for new construction<\/span><\/a><\/h4><\/div>
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New construction involves notary fees for the purchase of the land and notary fees related to the notarization of the mortgage. The type of mortgage registration for new construction is different from existing construction. New construction involves a conventional full mortgage registration(Hypoth\u00e8que conventionnelle<\/em>) whereas for existing construction – the cheaper – mortgage registration “light” suffices: the PPD(Privil\u00e8ge de Pr\u00eateur de Deniers<\/em>).<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>Caution<\/span><\/a><\/h4><\/div>
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In France, it is not unusual for a mortgage guarantee to be established in the form of a caution<\/em>. In effect, the lending bank then receives a bond from the cautionnaire<\/em> (a credit insurer specializing in this) that guarantees repayment of the loan amount if the borrower defaults. Intervention of a notary is not required and therefore a caution<\/em> is a favorable solution for the borrowing party because it is cheaper than a traditional mortgage guarantee. Instead, the borrowing party pays a percentage on the amount borrowed. In the event of default and therefore when the guarantor is called upon, the guarantor will also eventually turn to the borrower to demand repayment of the amount borrowed. Only a few regional banks offer this option for non-resident customers.<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>Additional costs <\/span><\/a><\/h4><\/div>
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In addition to the buyer’s cost, other costs are often involved, such as costs for a building inspection, the legal check of the purchase agreement, an appraisal, translations, legal, tax and financial advice and – if applicable – the formation costs of an SCI.<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>Ongoing costs when owned<\/span><\/a><\/h4><\/div>
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Once you own the house, you will owe annual local taxes; the taxe fonciere <\/em>and the taxe d’habitation.<\/em> Also take into account the annual recurring costs, when purchased in an SCI. Annual accounting and tax consulting fees are then involved or – if you do not choose not to file a tax return – 3% of the net value (house value -\/- size of mortgage) of the house.<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>Plus Value tax<\/span><\/a><\/h4><\/div>
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The plus value<\/em> tax is a French tax meant to discourage property speculation and is due when you sell the house at a profit. The longer the house is in your possession the lower the taxes owed. After a certain period, you owe no plus value<\/em> taxes at all when you sell.<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>Box 3<\/span><\/a><\/h4><\/div>
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On equity put into a French house, the tax treaty between the Netherlands and France agrees that France may in principle levy taxes on it. Specifically, the house does have to be declared in the Netherlands in the tax return, but a “double taxation avoidance” is applied that makes the net value of the house not<\/u> included in the box 3 calculation. In contrast, wealth tax is levied on real estate assets in France(Imp\u00f4t sur la fortune immobili\u00e8re (IFI))<\/em>, but there high thresholds are involved and the levy is usually zero. Only when the thresholds are exceeded – and that is for amounts greater than 1.3 million – will France effectively levy.<\/p>\n<\/div><\/div><\/div><\/div><\/div>