The main role in the registration process is played by a notary, whose participation is mandatory. They are responsible for the intermediary of the buyer and seller, conclude a preliminary agreement (compromis de vente), under which the buyer must pay a guarantee fee of 5-10% of the property value. The contract is valid for three months, during which the notary checks the legal purity of the transaction and calculates the expenses. They include:
The approximate amount of expenses for each case can be calculated independently using the online calculator on the website of the National Housing Agency.
How to pay less? Notarization is required by law, therefore you cannot reduce or exclude costs of it. However, you can try to negotiate with the seller about sharing the amount.
Contacting a real estate agency can remove most of the hassle, but it will cost another 1-7%.
How to pay less?
The participation of a realtor is not mandatory in France, but it can significantly simplify the search and negotiation process. But you should not consider the realtor as a security guarantor of the transaction. The responsibility for checking documents, establishing property rights and encumbrances, as well as making entries in the state register is on the notary. For this purpose, they may request additional documents, such as proof of the origin of funds.
When applying for a mortgage, add three more types of payments to the list of expenses:
How to pay less? If you really need a loan, carefully study all the details of the mortgage program.
There are three other ways to reduce real estate expenses by reducing tax deductions.
A specific French tax that was introduced in 1974. In 2016, its average size was €1,097 per year. Its cancellation began step by step from 2018, because it was one of the main election promises of the current president Emmanuel Macron. By 2022, the payment should be fully canceled; currently, benefits for certain categories are set at 30% for 2018, 65% for 2019, and 100% for 2020.
So, a married couple without children, if their total income for 2019 did not exceed €43,000, in 2020 can expect a 100% tax reduction for the main place of residence. A so-called regressive reduction is also possible: if the income of the same couple for 2019 did not exceed €45,000, they can individually calculate the percentage by which the tax will be reduced.
If the tax notification is mistakenly sent without taking into account the benefits, the owner can submit a request (réclamation) for recalculation within the stipulated time. The deadline for submitting it expires on December 31 of the year following the tax collection year. For example, for tax in 2018, the application deadline expired on December 31, 2019.
In France, remission of taxes is possible to exempt from paying real estate tax by 50% or 100% for 5 years for taxpayers who carry out energy-saving works in their homes built before 1989 for at least €10,000. The installation of heating monitoring devices or other energy-saving equipment is counted as well.
Remission for two years can also be obtained for newly built housing. In this case, you must contact the tax service within 90 days from the date of completion of construction.
If the property is rented out, the owner must pay income tax. When buying slum dwelling for renovation, you can get a discount under the Denormandie program, which operates in some French cities. Two conditions must be met:
The amount of the benefit depends on the term of the lease agreement:
For example, if the transaction amount is €200,000, the cost of repairs must be at least €50,000. Then when you sign a 12-year lease, the benefit will be €4,375 per year.
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