How to plan for inheritance when buying property as a couple in France

If you are thinking about buying property in France with your partner, it is important to understand how inheritance laws may impact property ownership if one of you dies. 

Seeking advice from a notaire, avocat, or foreign French law expert can help you navigate the complexities of inheritance rules in France. 

If you wish for your surviving partner to inherit the entire property, there are three main solutions to consider. 

In certain cases, the EU inheritance regulation may be applied, allowing you to opt for the law of your nationality.

Changing your marriage regime

In France, married couples are subject to specific matrimonial regimes that determine how their assets are owned and shared, both during marriage and in the event of death or divorce. 

If you marry in France, the notaire can help you decide on a suitable regime from several options including:

• communauté réduite aux acquêts: assets acquired after the marriage are jointly owned (excluding inherited property) 

• communauté universelle: common ownership of all assets acquired after marriage

• séparation de biens: all assets are owned by the person who paid for them.

For couples who were married abroad, the default regime depends on their particular country. 

Most British and US couples who married in their own country and later moved to France will usually fall under the séparation de biens regime unless they choose to change it.

Your matrimonial regime may also depend on exactly when you were married so it is worth getting advice to ensure you understand your situation.

Couples can change their matrimonial regime with the help of a notaire which requires formal procedures, including notifying creditors and potentially involving a family judge. 

Choosing the communauté universelle regime can ensure that the surviving spouse inherits everything, overriding French forced inheritance laws.

The tontine clause

A tontine is a special clause that allows two people to own property together with the right of survivorship. 

This means that if one party dies, the surviving partner automatically inherits the property, bypassing the usual inheritance rules.

The tontine clause must be included by the notaire at the time of property purchase as it cannot be added later. 

Using the clause works best when there is no significant age gap between the parties. 

A tontine provides a way to avoid heirs from making inheritance claims, but it may be contested if there is a large age difference between the owners or their financial contribution to buying the property.

While the tontine clause avoids forced inheritance, it is not without tax consequences.

Inheritance tax of 60% applies to the deceased’s share unless it is the primary residence and valued under €76,000. In certain cases, property transfer fees are also applicable.

For a couple living in the UK, French notaires will respect a tontine concerning a French home.

Société Civile Immobilière (SCI)

Another option for property ownership in France is through a société civile immobilière (SCI), a private company used for holding property. 

The process of setting this up is relatively simple and inexpensive, especially if done at the time of property purchase.

An SCI allows for greater flexibility in how ownership of property is divided, especially for non-residents who own holiday homes and offers a way to bypass French inheritance laws. 

For example, shares in the SCI can be transferred, allowing the surviving spouse to retain use of the property while the children inherit ownership.

SCI ownership can be tailored to meet specific needs, such as separating assets between joint owners. 

An SCI can also be cheaper and more flexible for property transfers. Income or capital gains tax will apply if applicable, according to the shareholders’ amount of ownership. 

It is also worth bearing in mind that an SCI can still be legally challenged by heirs.

Seeking expert advice from a notaire or lawyer will help you make the best decisions based on your individual circumstances and prevent future legal challenges.