Frequently Asked Questions - 6

• Can I resell my property at any time?

  You can sell your French property at any time and at any price. But beware 7,'strFAQsTitle'=>'Buying%20French%20property%20as%20an%20investment')) . "'>French capital gains tax which may have an adversely impact if you sell within two years of acquisition, or if you speculate in French property.

• Can I resell to a foreigner or must I resell to a Frenchman?

  You can resell to anyone who has the right to buy. This means to any French citizen or to a foreigner who is an adult with full legal capacity.

• Can you help me with all this?

  Yes. The pitfalls involved in selling French property may cause you problems and expenses, which can often persist for many years after completion. However, advance preparation is the key to a successful sale of French property. For peace of mind, therefore, we recommend that we carry out a \"health check\" of your papers and prepare the sales contract to ensure that your position is fully protected. On inspection by us many cases reveal flaws of ranging importance. Typically these include failure by the seller to obtain the necessary written authorisation(s) for various building or other improvement works to the French property. Generally speaking bathroom/kitchen conversions and other works carried out to the inside of a French property do not require planning permission. There are however exceptions to this rule. In several cases we have successfully obtained retroactive planning permission. Similarly, we may be able to conduct other searches and enquiries, which will answer various questions that may be asked by your buyer or his lawyers.

  For instance, if you contract to sell a French property but fail to transfer the freehold title, you must not only refund the purchase monies to your buyer (plus any difference if there has been an appreciation in value) but the French courts may order you to pay significant damages to your buyer. This problem is only likely to occur if the notaire who previously acted for you did not recite in your French title deeds that there was an unbroken chain f ownership dating back at least 20 years, or you knew that a third party might have a right of way, mortgage or other claim to your French property. To avoid potential exposure to litigation, we may need to ask the notaire for a written guarantee to be placed in your deeds stating that he is completely satisfied with your title to the French property.

  Please click here for further details about our French property sales services.

• Do I pay notaire's fees?

  Sellers of French property do not usually pay any French notarial fees.

• How do I market the property?

  You have a number of choices. Firstly, you can try to sell privately without the use of an agent, but this is probably not a good idea. Advertisements in English Sunday newspapers do produce results and save commission but you will be very much on your own if you use this method, with no one to offer you advice.

  Secondly, if you think that your property will be particularly attractive to the non-French, and possibly to a particular nationality, you can use an agent in England or elsewhere. For a variety of reasons, this is not to be recommended except in the case of agents who have a proven long-term practical knowledge of French methods of dealing with sales and particulars of property.

  Thirdly, you can instruct a French estate agent. Take the greatest care in your choice of French estate agent as their quality can vary widely. Remember that French agents tend to interest themselves in only a very small local area. No one may carry on the business of an estate agent in France unless he holds a carte professionnelle. This is granted only to persons who can fulfil certain professional qualifications or can prove that they have long experience in the field. In addition, they must be suitably bonded in respect of all moneys they will be holding on behalf of third parties. Certain other strict requirements are in force. It is worthwhile making sure that you are dealing with a French agent who complies with all these requirements.

  Fourthly, and probably best of all, you can instruct us! Our purpose is to show potential buyers worldwide properties for sale in France. Our database is updated daily and all the properties displayed are currently for sale. Our marketing service is entirely free and the prices always include the estate agent's fees (where applicable). Please contact us for further information.

• How much commission do French estate agents charge?

  French estate agent's commission is not charged on a scale basis but works out currently at about 5 per cent, sometimes inclusive and sometimes exclusive of TVA (19.6 per cent). It is usually open to some negotiation. However, be careful how the question of commission is dealt with. In most parts of France it is the seller who pays in full but you must enquire about this. Many agents suggest a selling price and then add on their commission and you sell at that higher price. You will then get the price net of commission although, of course, it is you who has the liability to pay the commission. This is not the same as buyers paying agents' commission, which except by local custom or special arrangement, they do not.

  Commission is earned when contracts are signed. Virtually every contract states that the parties were introduced to XYZ estate agent as a result of which commission of a set amount is payable by the seller. Agents have found it necessary, in many standard forms of contract, to ask the parties to undertake that, if by mutual agreement they cancel the contract but then proceed to complete the transaction without informing the agent in the hope of avoiding the payment of commission, both parties will become liable to pay.

  It is almost certain that your French estate agent will turn up at completion with his commission account. You will be asked to authorise payment, which will be made out of the proceeds of sale. If an agent has received the deposit, he may not pay himself his commission out of it and account for the balance. He must bring the full amount to the notaire on completion.

• Should I include the furniture in the sale price?

  Furnishing styles vary enormously from country to country. However, in general, it is advantageous to include the furnishings in the sale price. Second-hand furniture and equipment of any kind commands only the lowest possible prices in France if sold separately from a property. Therefore, it is preferable, if you do not need them elsewhere, to add something on to the sale price for kitchen equipment, such as dishwashers and refrigerators, rather than to try to sell it elsewhere.

  Even if the property contents are listed in the French estate agent's particulars, you can in theory remove them. By law, however, you must include in the sale anything that is part of the fabric of the French property (e.g. plumbing, central hating and other installations integrated into the structure) which are classed as immovable property ( immeubles) and cannot therefore be removed, unless it is specifically agreed between the buyer and the seller that particular items are excluded. The French courts have defined immeubles to include trees and shrubs in a garden; electric sockets, wall switches, lamp socket holders and wiring, and garden sheds/greenhouses built on foundations. French law defines immeubles to include wine presses, vats, barrels and distillation stills located in the property!

  Over the years, various meubles can get fixed to a French property and lose their removable nature by becoming part of the structure. French law defines these to be immovable if the owner attached them to his property on a permanent basis. For example, the French courts have decided that the seller should not have removed a bath and toilet, which in that particular case were held to have been fixed to his property on a permanent basis (but see below).

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  our buyer should assume that any meubles will be removed by you unless you have formally agreed to sell these to him in addition to the French property. The French courts have defined meubles to include cookers, freezers, fridges, dishwashers, washing machines and any similar detachable equipment, heaters connected to mains supply only by plugs or detachable means of connection, lampshades and light bulbs, carpets, underlay and curtains, and free-standing garden furniture and sheds.

  Rather confusingly, in one case the French courts held that prefabricated kitchen cupboards were removables, which were not sold with the property; but in another case held that a fitted kitchen was immovable property and could not be removed by the seller. These two conflicting decisions can be partly explained by the fact that a French court judgement in one case is not binding on other courts and there is therefore no way of accurately predicting how the French courts are likely to decide a given case.

  More specifically, the acid test is the extent to which property is a permanent part of the structure of the main building. For example, French law states that movable property becomes immovable property if it has been sealed in plaster, lime or cement, or if it cannot be removed without breaking or damaging that part of the property to which it is attached. Examples include mirrors, paintings and other tableaux which are only classed as immeubles if their backing is integral with the woodwork or other fabric of the main structure of the building. So, if removal of property does not cause breakage or damage (e.g. major deterioration to plaster work) to the main structure, it will usually be classed as meuble. For example, in one case the French courts held that electric radiators were removable by the seller, even though such removal resulted in minor damage necessitating some replastering. And yet in another case the French courts held that a medieval fresco in a disused church was removable property, despite the fact that it was integral with the fabric of the main structure. Other litigated cases have involved curtain rails and tracks, fitted (and other) bookshelves, built-in kitchen units and appliances, built-in cupboards and wardrobes, electric storage heaters, wall lights, water softeners, decorative door furniture and door chimes, bathroom fittings and free-standing garden ornaments.

  Litigation in France is not a desirable option. To avoid disputes, an inventory should be prepared and attached to your purchase contract detailing what is included in the sale price and what is not. Please contact us for further assistance.

• Should I sell?

  It is impossible to know when you buy a French property how long you are going to remain in it or what will be the reasons for wanting to sell it. You may lose a lot of money if you sell. So have you considered the following two alternatives?

  Firstly, have you considered 7,'strFAQsTitle'=>'Buying%20French%20property%20as%20an%20investment')) . "'> letting your property ? In recent years, thousands of British families or groups of friends have bought a property in France to escape from cold winters and wet summers. For many, their personal use of the property is a source of considerable pleasure. Although by UK standards property price in France are still generally low, and purchase loans are readily available, many potential buyers are discouraged from purchasing French property for two main reasons.

  First, they do not want to feel tied down to the same property each year when there are other countries or parts of France to explore. Secondly, their available holiday time is limited to two or three weeks in the summer and, although friends and relatives may occasionally visit the property, it will otherwise remain unoccupied for the rest of the year.

  On the other hand, more than 60m tourists visit France each year. This is not a passing phenomenon and with new, improved and cheaper transport links, the demand for self-catering accommodation in France continues to grow from foreign holidaymakers, especially in Britain and northern Europe.

  We recommend that you buy a copy of \"Letting French Property Successfully\" which has had excellent reviews. The purpose of this book is to provide a guide to the main practical, legal and tax processes necessary to let your property successfully in France. It explains how, in the short term, the rent you charge might not only cover annual maintenance and other expenses, but also leave you with surplus income to pay for your own holiday. With careful planning, more systematic lettings could also earn you enough income to recover your initial capital outlay and borrowings. You may even decide to buy more property to let as a business!

  This book is a very good starting point for anyone looking to gain familiarity with most of the issues, questions to ask and decisions to take when acquiring French property as an investment. The authors have covered each stage of the French property experience from choosing the property through to purchase - financing, how to own, and the legal process itself - on to landlord and tenant issues. There is a readable explanation of French succession law and matters' relating to wills. As well as providing input to strategic decisions there is a wealth of detailed support material covering such matters as the risks of unintended agricultural tenancies, licensing in relation to alcohol, and a comprehensive French-English glossary of terms. There is also a series of precedents and a comprehensive chapter dedicated to the taxation of rental income, in both France and the UK, for both individual and corporate owners. Please click here for further information.

  Secondly, have you considered sharing the load? The clear choice for new buyers wanting to enjoy the benefits of owning and occupying property in France for limited periods only with the reduced costs that such a purchase can bring is to use a non-time sharing method of company ownership (called a société civile immobilière d'attribution à temps partagé or SCIATP) which allows the owners to share ownership with friends or others who have similar interests. As explained below, the use of such a structure can also have significant French succession law-avoidance advantages.

  The scheme can apply to a house or part of a house (for example, a flat in a block). A property can be brought within its scope either by being bought by an SCIATP previously formed for that purpose, or a property owned by one or more owners can be transferred to an SCIATP.

  This is also the most satisfactory method for an existing owner wishing to reduce his capital burden whilst retaining an interest in his property. For example, the SCIATP acquires the French property from the original owner who then offers for sale as many shares as he wishes (e.g. 75% if he wants to be able to occupy the property for about three months in every year). French law provides precise rules as to the way in which the property must be managed, how management costs are dealt with, the rights of each occupier vis-à-vis each other and their rights to deal with their occupancies and generally everything which is necessary for the enjoyment by these shareholders of the property by the company.

  The right to occupy the property at agreed times stems from the ownership of shares in the company. The basic rules laid down by French law are strict since they are intended for the protection of the public and cannot in most cases be varied.

  The price for the shares will depend not only on the value of the property but also on the periods in the year in which the shares sold give rights to occupation. However, since these periods are likely to be spread over the year over periods of more than (say) six weeks at a time, it is probable that the price for all of the shares will be more or less the same. The sale by the original owner of shares will, of course, give rise to French capital gains tax, but unless the property is of recent acquisition and the owner has benefited from an unusual rise in the French property market, this tax is not likely to be high if it exists at all.

  The equivalent of the Articles of Association of an English company are the statuts of an SCIATP. All the basic rules relating to the use of the property are set out in this document. These will cover, in addition to the dates when the property is occupied by shareholders (which can be varied by consent of all the shareholders), the important provisions relating to the transfer of shares during a shareholder's life and on his death.

  The normal French rule is that transfers between existing shareholders may be made freely as may transfers on a death to heirs entitled to inherit, or spouses, but this can be varied since the shareholders will be subject to English and not French succession law. Otherwise, the body of shareholders controls who can become shareholders and such a decision requires at least a majority or unanimous vote.

  French law specifically requires that shareholders must have the right to let the property they occupy during their period of occupation. The shareholder remains liable to the SCIATP for his tenant's default.

  Rules for the holding of meetings of shareholders and for the passing of resolutions by correspondence and similar management procedures follow quite closely what is common form in English companies.

  Overall management is in the hands of the gérant who basically takes the place of a director of an English company. He may be appointed or removed by a simple majority vote of the shareholders but the statuts can provide for a larger majority or a unanimous vote. He can, but need not, be a shareholder. It is his duty to act on behalf of the SCIATP subject to such limitation as may be placed on his powers.

  The gérant is responsible to report to the shareholders when the annual accounts are submitted. The SCIATP will be liable for taxe foncière (property tax) and taxe d'habitation(local authority tax) but, unless it has income - which is unlikely - for no other French taxation.

  He is assisted by an Executive Committee composed of shareholders (the number is fixed in the statuts) whose task is to advise the gérant or the shareholders on all matters relating to the management of the SCIATP which either have been referred to it or which it enquires into of its own volition. It is the recipient of the SCIATP's accounts and has a right to call for production of all documents and papers affecting the SCIATP.

  The cost of maintaining and managing the French property will, as with these taxes, be shared out among the shareholders in proportions which will reflect the length of each period of occupation and presumably the date in each year. The gérant arranges for the collection from each shareholder of his share of expenses and, if needs be, may ask for payments on account in advance. There are rules to ensure prompt payment.

  Unless the finances of an SCIATP attain a fairly high figure - not likely where only a single house is involved - it is not necessary to appoint auditors, but in that case the SCIATP must appoint an independent qualified person who is not a shareholder to prepare the annual accounts.

  The use of an SCIATP is also a useful tool to avoid the adverse implications of French succession law. In brief, French succession law applies to all land, houses and flats in France irrespective of the nationality, domicile or residence of the owner. This put simply, means that children have the absolute right to inherit but surviving spouses have no such rights. Furthermore, if you do not structure joint ownership of French property through an SCIATP or a similar French company, the two alternative methods of joint ownership re likely to cause problems. One method (indivision) was created to deal with property inherited by various members of the family and is quite unsuitable for property, which is bought for sharing with other people. The other method (tontine) has the effect of the property belonging to none of the joint owners until the death of all except the last survivor, who then acquires the whole of the property. This is clearly not suitable for owners who are strangers to one another.

  The purchase and transfer of French property and the formation of companies in France is the sphere of a notaire practising on French soil. However, any person interested in making use of this scheme either as a means of selling part of his interest in his French property or of buying into such a property on such a basis should consult lawyers in England expert in French legal matters since their residence and/or domicile in England makes this highly desirable.

  Please contact us if you would like any further assistance or information about this attractive scheme.

• What about cancelling buildings and contents insurance?

  There are special rules about insurance on a sale. They are complicated but you need not worry about them. On completion, just make certain that it is agreed that you cancel your insurance on the property. You will have to do this yourself or get your local advisor to do it for you because it is not part of the notaire's duty.

  If you do not cancel your insurance policy(ies) they will automatically continue - and you will be responsible for the premiums due - for a period of at least 12 months from completion of your sale.

  One way to get round this problem is for us to arrange for a special clause to be inserted in the contract providing that buildings and contents insurance cover will continue until the acte de vente is signed and that your buyer will take out his own insurance from that date.

• What about cancelling utility bills and rates?

  A few weeks before completion of your sale is scheduled, you should arrange (via the French estate agents or us) for the electricity, water and other meters to be read by the relevant authorities on the day of completion, asking that a final account be sent to your UK address for your settlement. If your buyer wishes to take occupation of the property on the day of completion, do not arrange for the utilities to be disconnected unless he specifically asks you to do so.

• What about my French mortgage?

  Any mortgages or other charges registered against your French property must be redeemed on completion of your sale. You may also be required to pay an early redemption penalty of up to 6 months interest, which by law cannot exceed 3 per cent of the outstanding capital owed on the mortgage immediately prior to repayment.

  It is common to let a French mortgage extinguish automatically at the French land registry two years after repayment. However, your buyer, his lender and/or the notaire may insist that you obtain and register a form of release (mainlevée) which will usually cost you about 0.1 per cent of the value of the original loan. The notaire will usually deal with these formalities for you and deduct his fees from the sale proceeds.

• What about outstanding local taxes?

  Unless you let your French property you will be solely responsible for any outstanding taxe d'habitationdue (which cannot be apportioned with your buyer) until 31 December of the year in which you complete your sale. taxe foncière can be apportioned with your buyer if a special clause to that effect is inserted in your contract.

• What about outstanding service charge payments?

  If you are selling property en copropriété, it is the duty of the notaire acting for you to obtain from the syndic a note of the service charges due from you to the date of sale and to pay these direct to the syndic out of the proceeds of sale. You will usually be asked to confirm the figure, which you cannot do exactly because no one knows what the final service charge figure will be but you should have a rough idea. Query it if you have any doubts. Obviously, it may turn out that the amount paid to the syndic was too much or too little. It is not the task of the notaire to sort this out at the end of the service charge year and very frequently nothing is done about it.

  If works to your block have been voted at a meeting of flat owners before completion of your sale, you will be liable for this expense although it is incurred after you have sold the property. In such a case, someone will chase you for the cash in due course. Remember that the syndic has a lien on the whole of the proceeds of sale in the hands of the notaire, who cannot therefore pay out this money to you until outstanding service charges to the date of completion have been agreed and paid.

  The fairest solution is usually to ensure that a special clause is inserted in your contract specifying that you will pay for all work decided upon by the copropriété before the contract is signed, and your buyer will only pay for work which is decided upon between the date of signature of the contract and the date of completion of your sale provided that he is allowed to attend the meeting of the copropriété which decides upon such work.

• What about pre-emption rights?

  If you let your French property your tenants may have a first option ( droit de pre-emption) to buy it from you, even if you have contracted to sell elsewhere. If your property is in rural France, neighbouring farmers may have similar rights. Various French authorities may have pre-emptive rights if your property is needed for rod widening schemes or similar infrastructure projects. As previously indicated we can make various searches and enquiries to establish whether your French property is likely to be affected by any pre-emptive rights in the future.

  In the event that a pre-emptive right affects your French property, the relevant authority must be informed of your intention to sell after the contract has been signed. Usually your notaire sends a declaration d'intention d'aliéner (DIA) on the pre-emptive right holder specifying the agreed sale price and full identity of your buyer. The holder of the pre-emptive right usually has 2 months in which to reply to the DIA. In many cases no reply is ever-forthcoming buy you must still usually wait 2 months from the date on which the DIA was posted before completion of your sale can legally take place. However, some French authorities will expedite their response to the DIA on payment of a fee (usually no more than about £50).

• What documents do I need?

  There is no reason why initially we should not prepare the sales contract but you are well advised to have it checked by your local adviser before you sign it. In most cases, you do not need a notarial contract but if your agent produces anything other than a compromis de vente make sure you have it checked.

  No one can properly prepare a contract without showing the acte de vente to you and, if you are selling a flat, the règlement de copropriété. If you have not got the expedition of your acte de vente, all you need is to remember is the name of the notaire who acted in your purchase and the date of the purchase. He will supply you with a further copy.

  Under the Loi Carrez if your French property forms part of a copropriété your buyer can cancel his purchase within one month of completion unless the sale contract specifies in square metres the surface area being sold (cellars, garages or any room measuring less than 8 square metres are excluded). If the surface area quoted is inexact by more than 5 per cent, your buyer can either cancel his purchase or obtain reimbursement from you of a sum equal to the overpayment made by him. To avoid possible disputes you should always have your property measurements calculated exactly in compliance with the Loi Carrez, which we can arrange for you if required.

  In certain parts of France the local authority may require you to obtain an état parasitaire certificate from a local expert - which again we can arrange for you if required - confirming the presence or absence of termites or other xylophages (wood-boring insects) in or near to your property. Nests giving rise to infestation, which can be detected early, have been recorded as far as 30 metres away from an infested building. Your buyer can withdraw from the sale unless a clear certificate is annexed to the acte de vente on completion.

  Some départements in France also require you on completion to produce a certificate confirming to your buyer that there is no asbestos in your property.

• What happens if completion is delayed?

  For various reasons sales of French property often do not complete on the date limite provided for in the contract. Although you may initially be relaxed about this the time may come where further action is necessary. Unless the contract contains an appropriate penalty clause obliging your buyer to pay you a further sum of money for each day that he defaults, your only recourse is to instruct a French bailiff ( huissier) to serve a notice on your buyer obliging him to complete the transaction within 15 days. If after 15 days your buyer has still not completed his purchase a French barrister (avocat) must usually be instructed to issue proceedings against your buyer.

• What happens to the deposit?

  When your buyer signs the contract he must usually pay a deposit of 10 per cent of the purchase price to the notaire or a licensed French estate agent which is held in a non-interest bearing account. However, we can arrange for the deposit to be placed in an English interest bearing account in which case a proportion of the interest, which accrues, can be paid to you on completion.

  If all the conditions suspensivesare met, but your buyer still withdraws from the contract, you can usually keep all the deposit. Depending on the wording of the contract you may also be entitled to damages and/or other remedies. If you withdraw from the contract without your buyer's consent, you must usually refund the deposit to him and also pay the same amount again in damages.

• What is a mandat de vente?

  No French estate agent may deal with property transactions in France if he does not hold the prior written authority (mandat) of the person for who he is acting.

  These documents may look simple but they are full of hidden traps for those not used to them.

  Each person instructing a French estate agent must receive an original copy. Make certain that your mandat is fully signed and dated. Every mandat must be entered in a register in date order and the registered number must figure on the copy given to the client. Failure to abide by the rules results in no commission for the agent and can lead to a term of imprisonment or a fine and the withdrawal of a carte professionnelle.

  Read with the greatest care any mandat you are asked to sign. It may be exclusive or non-exclusive and limited in time. Some are for a given period only; some are for an initial period and then run on until cancellation by the client. If they require cancellation, this must be done precisely in accordance with the stated provisions. The authority should state the minimum price at which the seller will sell and great care must be taken to ensure that the mandat does not include a specific power for the agent to sign a contract on behalf of the seller at that price. Indeed, it is often safer to exclude that power.

  Be very careful about giving more than one mandat at a time even if it is non-exclusive or you may find yourself with two sets of commission on your hands. Equally, if you have given only one mandat, make certain that if you find a buyer through your own efforts, you are nevertheless not liable to commission under that mandat.

• What is a realistic sale price?

  There is no doubt that a well cared for property sells more easily than one which is dilapidated. Although furnishing styles vary enormously from country to country, it is generally advantageous to include the furnishings in the sale price. Second-hand furniture and equipment of any kind commands only the lowest possible prices in France if sold separately from a property. Therefore, it is preferable, if you do not need them elsewhere, to add something on to the sale price for kitchen equipment, such as dishwashers and refrigerators, rather than to try to sell it elsewhere.

  If you originally bought a new property, so that the stamp duty you paid was well below the usual rate, and you were the first buyer from the developer, and you sell within five years of completion of the building, your buyer will again pay a low stamp duty. With the high rates of stamp duty in France, you may think that this makes the property cheaper and easier to sell, but this is often untrue. Since high stamp duties are payable on 'old' properties, their sale price reflects this. Alternatively, the price of a 'new' property may be increased to take account of the low stamp duties.

• What is the tax position?

  We hope you have many years of happiness from your French property before the time comes to sell it. That time will eventually arrive, though. And that's when capital gains tax kicks in.

  Non-residents selling French property often believe incorrectly that any gain in the value of the property needs to be declared and taxed in their country of residence. In fact, the French tax authorities will want 33.33 per cent of any gains realised by non-residents on the sale of French property. If the French tax authorities believe that your acquisition of French property was business or profit motivated, the rate of tax increases to 50 per cent.

  In France, there are two ways of arriving at the net taxable gain depending on whether the vendor is an individual or a commercial company. If the property is owned by an SCI (a French property-holding company) the capital gains tax treatment will depend on whether the SCI is subject to French income tax or French corporation tax. In the latter case, it will be classed as a commercial company and subject to French business capital gains tax.

  Capital gains in the hands of individuals or SCI's subject to French income tax are determined as the difference between the sale price and the base cost, which is indexed for inflation. The base cost includes the purchase price and expenses, plus any major restoration work (but not painting, decorating or other embellishments). The difference, i.e. the gross gain, is then reduced by 5 per cent per year of ownership beyond the second. In other words if an individual has owned the property for over 22 years the gain is totally cancelled.

  The 5 per cent reduction is granted for each full year of ownership (beyond the second) from the exact date of purchase. For instance, the full period of ownership of a property bought on 15 May 1990 and sold in March 2000 will be 9 years. If the property was sold after 15 May 2000 the vendor would gain an extra year and thus a further 5 per cent reduction.

  The gross gain is further reduced by a general annual abatement of FrF 6,000 and, if it is their first sale of a secondary home in France, the vendors may apply an abatement of FrF 40,000 (for a married couple) or FrF 30,000 for a single person, plus FrF 10,000 per child (whether dependent or not). For this, they must have had the use of the property (i.e. not rented) for a five-year period, which need not be consecutive from the date of acquisition.

  The business capital gains regime is not so generous, as the base cost is reduced by a 2 per cent depreciation on the buildings per year of ownership, thereby inflating the gain. Furthermore, no indexation or other abatements are applicable. This method applies, for instance, to foreign limited companies owning French property, but also to any SCI liable to French corporation tax (usually when they have rented the property out on a furnished basis) although there are ways round this problem. It also applies where an individual has registered the property as a business asset, used for instance for seasonal lettings. In this case, the taxpayer has benefited from depreciation for the purposes of French income tax on the rental income.

  However, there is an exemption from French capital gains tax for small businesses, but the following conditions must be fulfilled: the activity has been running for at least five years at the time of the property disposal; and the annual turnover does not exceed FrF 1m.

  Non-residents may be asked to appoint a fiscal representative whose responsibility is to calculate and to collect the French capital gains tax. The person or business acting as a fiscal representative undergoes a \"tax audit\" to gain the French tax authorities' approval.

  The fiscal representative is responsible for the payment of French capital gains tax if the liable taxpayer they are acting for fails to pay this. For this reason it is very rare to find a person who readily accepts this role and non-residents are left with no choice but to appoint a professional firm to act as fiscal representative. These normally charge a fee of 1 per cent of the sale price, deductible from the taxable gain. The service they offer for this fee includes advice and calculation relating to the computation of the taxable gain, the preparation of the relevant returns, and representation of the taxpayer in case of conflict with the French tax authorities.

  The fiscal representative will scrutinise each invoice claimed for deduction in respect of renovation, property improvements and so on. To be allowable, the French tax authorities will usually require sight of all original TVA receipted invoices (copy invoice, receipted estimates or 'back of an envelope' type invoices are normally unacceptable). If you have used British or other non-French contractors, the French tax authorities will usually only allow their charges as an allowable deduction if their invoices expressly state that they relate to your French property.

  Taxpayers who have not kept any evidence of renovation work may deduct a notional amount of 15 per cent of the acquisition price. This notional deduction is subject to evidence that work has effectively been carried out and may require the certificate of an expert. If the taxpayer has done the work himself and has kept all invoices for material and equipment, the deduction can be fixed as the total invoices multiplied by three to reflect the work done.

  If they feel that the deduction of some invoices may be questionable, but deduct them anyway, the fiscal representative will retain a sum as surety to cover the risk of reassessment. The latter runs for a four-year period after the filing of the French capital gains tax return.

  Where there is a capital loss or the gain is low, the notaire will normally apply for a dispensation from fiscal representation.

  British resident must also report their sale of French property to the Inland Revenue. The French tax authorities are likely to pass on to the Inland Revenue any information they have about your French affairs to include copies of your French bank account statements and any capital or interest credited to you. The Inland Revenue also has the right to see all correspondence leading to the sale of your French property.

  Under the Anglo-French Double Tax Treaty any liability for French capital gains tax should be wholly or partially offset by way of credit relief against any UK capital gains tax.

• What legal issues are involved?

  The selling process is the reverse of the situation when you bought. Please note the following points:

  You are not liable for any visible defects ( vices apparentes) affecting your French property, its equipment or services, which your buyer or his surveyor could have discovered from his own inspection. However, you remain potentially liable to your buyer for any invisible defects ( vices cachées) for 10 years from the period when he first discovers the defect, which may be much later than when it actually occurred.

  However, we can exclude your potential liability by arranging for the insertion in your sale contract of a carefully worded non-guarantee clause

  .

  It is important that you agree the right type of contract. Please do not sign it, even if it purports to be accurately translated into English, until it has been thoroughly checked and approved by an independent legal adviser. For example, what penalties apply if your buyer fails to complete his purchase on the date provided for in the contract? The answer is usually none, although we can insert a tailor-made clause requiring your buyer to pay a penalty for each day that he fails to complete his purchase. Do you agree with all the conditions suspensives(let-out clauses) inserted by your buyer?

  If for any reason you do not wish to sign the acte de vente in the presence of the notaire in France we can arrange for a French power of attorney to be sent to you for signature in England, the effect of which authorises the notaires clerks to sign any documents on your behalf.

• When do I get my money?

  You must accept that you will not get your proceeds of sale on the day of sale. How soon you will get them varies from notaire to notaire and depends on a number of factors but, on average, you should expect not to receive them for at least ten days. Make sure that you or your adviser checks with the notaire when the payment is likely to be made and, if you are in a hurry, make certain he is aware of this. Since notaire's do not keep clients' accounts in ordinary clearing banks, payment will either be paid into your French bank account or through a French clearing bank to your account elsewhere, which will add to the delay in it reaching its correct destination.