Reader Question: In 2004, we and another couple purchased a French property as a second home. We now wish to buy out our friends. Each couple agreed to give the other first refusal at market price. What can we do to make this a smooth transition?
As you have agreed, the transfer must be for market value. This is where you will need an estate agent to produce a written valuation.
The notaire’s fees, which include the French land registry taxes, are based on the value of the part of the property changing hands.
Your friends should consider their CGT liability in both France and their country of residence.
For this amicable transaction, the parties can agree to waive the requirement to produce the file of reports (dossier de diagnostic technique) necessary for a sale, which provide information relating to the condition of electrical and/or gas installations, termites, risk of asbestos or lead exposure, as applicable.
Sales process is quicker
The formalities and timescale are less than for a traditional full sale.
There is no requirement for you to be given a cooling-off notice, nor for a contract stage, so you can proceed straight to the transfer deed (acte de licitation).
In our experience, the more information you agree on, gather and provide to the notaire at the outset, the smoother the transfer.
In addition to the estate agent’s estimate, confirm the price agreed by the parties.
Ensure you are up to date with all payments for local taxes, utility bills and insurance, and make plans for taking metre readings and making pro-rata payments on completion.
Prepare to update your insurer about the change of ownership.
Produce a summary of any works that have been carried out and provide receipted invoices.
Expect to pay the purchase price in euros via the notaire’s account. If you hope to be able to keep the purchase price in sterling, discuss this at the outset.