Racine Avocats
Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?
There are no restrictions on foreign ownership or occupation of French real estate, including shares in property owning companies, subject to very limited and specific exceptions such as sensitive activities (certain agricultural lands, property related to certain sectors such as arms, research, etc.). Anyone (including foreigners) can therefore own and occupy French real estate properties, subject to these very few exceptions.
Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?
There are no restrictions on lending for the purchase of real estate by foreign companies, subject of course to the usual KYC procedures. That being said, however, banks will in practice ask for a French borrowing entity.
Buying
Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.
The fees and costs to buy real estate usually range between 7 and 8% for old buildings (i.e. built more than 5 years ago) and 2 to 3% for new builds (to be noted that 20% VAT will apply to new builds). The main fees and costs consist in the notary fees and the transfer taxes, as follows:
- 5,81% transfer tax (up to 6.4% depending on the location and nature of the real estate asset) for old buildings and 0,799% for new buildings;
- 0.1% real estate security tax;
- 0.799% notary fees (+VAT).
Owning
Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner
Yes, the main taxes are:
- land tax, the amount of which varies depending on the location of the property in the country, and associated local taxes, covering various public services.
- specific taxes linked to the ownership of certain categories of assets, e.g. offices, commercial premises, parking places, which, again, depend on asset location.
These taxes may be passed on to the occupier not being owner, provided that the lease expressly and unambiguously states so. To be noted that in commercial leases, the Commercial code was amended lately to prevent certain taxes to be passed on to the tenant, but this does not cover the main taxes mentioned above.
Tax Breaks
Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so, what are they?
There are no tax breaks or other incentives for foreigners to buy real estate
How is the ownership of Real Estate evidenced in your jurisdiction?
Ownership of real estate is evidenced through a deed, which constitutes the title to the property. This deed must be registered with the land registry (service de publicité foncière) by a notary, in order to be valid and enforceable vis-à-vis third parties. In the context of the sale of real estate, the notary will check the validity of the title to the property by ensuring that there is a traceable and uninterrupted ownership of the asset over a period of at least thirty years. The notary will then register the sale and purchase agreement with the service de publicité foncière.
Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?
No. As per the above, any title to property must be registered with the land registry, and all documents published at the land registry are available to the public for a nominal fee. In every transaction, notaries will carry out searches with the land registry to ensure that there is valid and unencumbered title to the property.