Buying a home in France
The information in this brochure is based on our understanding of French property law and practice at
the date of publication. We cannot guarantee its accuracy. This booklet is a general guideline and is
intended for your information only. Specific advice applicable to your own circumstances should be
obtained from a French Notary and/or relevant professional bodies.
YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR
OTHER LOAN SECURED ON IT.
THE FOREIGN CURRENCY EQUIVALENT OF YOUR EURO CURRENCY MORTGAGE MAY
BE INCREASED BY EXCHANGE RATE FLUCTUATIONS.
Before lending to you, CCF must ensure that you can afford the repayments. Mortgages require a charge
on the property and appropriate life policies. All loans are subject to security and status.
CCF is a member of the HSBC Group.
CCF is a limited company with share capital of 377,048,505 euros
Head Office: 103, avenue des Champs-Elysées 75419 Paris Cedex 08 SIREN 775 670 284. Approved
insurance broker (financial guarantees and insurance of professional civil responsibilities conform to
articles L530-1 and L530-2 of the Insurers’ code).
Your next move
Now that you have a definite project, apply for a mortgage:
1. You have already decided on a property
or you have chosen the region where you
would like to buy, then complete the form
enclosed at the back of this brochure and
send it by post to CCF in the envelope
provided, or fax it to the number shown on
2. If you have received the electronic version
of this brochure, please return the ‘Request
in principle’ by e-mail to CCF in Paris at
Issued by HSBC Bank plc. Credit Commercial de France (CCF) is a member of the HSBC MCP 16257. 12/02. Printed by Paul Scott Print Ltd, Sheffield.
Group, one of the world’s largest banking and financial services organisations with some 7,000
offices in 81 countries and territories.
HSBC Bank plc
Mortgage Service Centre
PO Box 1546
Welcome Home, welcome to HSBC
We offer tailor-made, innovative solutions
to meet your banking needs...
…at home in your country, at home in France,
at home across the world.
To truly understand a country and its Should you not be an existing HSBC
culture, you have to be a part of it. customer we invite you to open a HSBC
account in your home country. No doubt
That’s why at HSBC, we have local banks in
you will be offered the warmest of welcomes
more countries than anyone else. And all of
in one of our 8,400 branches in 81 countries.
our offices around the world are staffed by
local people. Your accounts will only ever be a click away
thanks to our e-banking services which allow
It’s their insight that allows us to recognise
you access any time, any where.
financial opportunities invisible to outsiders.
But those opportunities don’t just benefit
our local customers. Innovations and ideas
Think of it as local knowledge that just
happens to span the globe.
Where do you start?
If you are planning to buy a permanent or a holiday home
in France, and you are currently a non-resident, then HSBC
As you would expect from one of the world’s The home buying process in France is unique
largest banking and financial services in many respects. This brochure has been
companies, HSBC can offer you practical especially compiled to guide you through the
help with the purchase of a French property. purchase process and offer you some useful
All the experience of CCF, a member of the advice in choosing the right home for you.
HSBC Group, is now available to you.
CCF can advise on financial solutions for
CCF and its subsidiaries have over 850 your purchase.
branches throughout France. In many of the
major towns and cities we have bilingual
French/English mortgage advisors ready to
help you. So don’t worry if you are not a
fluent French speaker, we can ensure that all
the details of your home purchase are fully
explained to you, either by CCF or by
recommended professionals (solicitor,
Buying a home in France
This section covers the key stages of buying a property in
France and helps you to get started.
Finding the right property Many home buyers are attracted by the fact
that property prices in France appear to be
You may have already decided on a specific lower than abroad. There are reasons for this
area or you may have a French region in and before you start you should be aware of
mind, having been there on holiday for the following points:
example. Finding a property in France is a
similar process to that in other countries. • French domestic property is not usually
There are many estate agents in France bought as an investment. Apart from
(agents immobiliers) who will put you in some very fashionable or highly sought-
touch with people selling property. A after areas, prices usually rise in line with
selection of property search websites are inflation. Therefore, you would need to
detailed at the back of this brochure. own a home for at least three years to
recover the high fees associated with
Alternatively, there are estate agents in the buying, even before considering
UK for example who have details on French maintenance or improvement costs.
properties. There are also many specialised
magazines available for people interested in • France has a similar population to the
the French way of life. These publications UK but is three times the size. There is
offer useful contacts and real estate therefore less pressure on land and hence
advertisements. lower prices.
• That isolated farm cottage set between
vineyards and a stream may require major
renovation. It might not have the same
appeal to a French family, hence the lower
price; and you should consider possible
difficulties of resale in the years to come.
We do not want to put
you off ‘la bonne vie en
France’ but it is essential
to start with the realities
before embarking on the
You will need to work out in the early stages exactly what price
you can afford to pay, including an estimate of the likely
One of the most common mistakes made by Purchasing a property in France
people buying an old property in France is to
underestimate the cost of restoration and In many ways, the French purchase process
modernisation. If the property needs work affords a certain amount of protection to the
then get accurate estimates from a master buyer. A formal contract is entered into at an
builder (maitre d’oeuvre) before signing any early stage. This could even be on the day
form of contract. Better still, have a that you see the property and agree a price
structural survey completed. This can be with the person selling it subject to a
expensive and is not normally done in France, statutory seven day cooling off period.
but it will provide reassurance if you have This initial contract makes it difficult for the
any doubts. vendor (seller) to pull out without financial
The price that you can afford to pay will penalty, thus reducing the risk of someone
depend for most people on what you are able coming in with a higher offer (gazumping).
to borrow by way of a mortgage. This in It is also difficult for the buyer to withdraw
turn will be based on your income and without forfeiting their deposit.
existing loans and other commitments, as Once you have found a suitable property, you
well as the length of time over which you should check if the purchase price includes
intend to repay the mortgage. You can ask the estate agent’s commission. The
CCF whether they can grant the mortgage commission is charged on a sliding scale of
you have in mind by completing the enclosed between 5% to 10% (the cheaper the
short-form application for an ‘in principle’ property, the higher the fee as a percentage
decision. of the sale). It is usual for the commission to
Then you will need to allow for the deposit, be included in the purchase price and to be
usually 10% of the purchase price and paid by the seller.
payable at the preliminary agreement stage.
As a general guideline you will also need to
budget for between 10% and 15% of the
purchase price for extras such as independent
legal advice and a full structural survey.
In reality the exact amount will depend on
the professional services used, the age of the
property, its value and the amount of
The role of the ‘notaire’
In France the conveyancing process is undertaken by a notary
A French notaire is a publicly appointed Initial agreement to purchase
official who is responsible for ensuring the a property
property has good title (ie, no irregularities
in the ownership) and that the purchase or Having found a suitable property, you will
sale is correctly transacted. Because notaires negotiate and enter into an initial agreement
are personally responsible for the contracts with the vendor. This agreement is called a
drawn up they must be objective in the ‘Compromis de Vente’ or ‘Contrat de
advice they give and be impartial in their réservation’ and is a binding contract
dealings with the parties concerned. between the buyer and seller which sets out
A notaire represents neither the seller nor the the terms and price of the sale.
buyer but the French Government. They can For new properties being built the most
also act for a client anywhere in France. common contract is a ‘contract de
The same notaire therefore usually acts for reservation’ (a reservation contract).
both the vendor and the purchaser. This is There are various other contracts such as a
not obligatory and you can appoint promise to purchase (promesse d’achat), an
your own notaire if you wish. The fees (paid exchange of letters (l’échange de lettres) and
by the purchaser) are fixed by law and will be an offer of sale (l’offre de vente), all of
split between both notaires if two are which offer little protection to the buyer. We
appointed. CCF has contact with many can offer you advice on these, but generally
English speaking notaires in France and can they should be avoided.
put you in touch with one.
The preliminary contract will include a full
You should be aware that the notaire’s job is description of the property, the latest date by
to finalise the agreement he has been told which completion must take place, the price,
has been recorded. He is not there to advise any escape clauses and the identity of both
or warn the purchaser of any inadequacies in the vendor and purchaser. The preliminary
it. His role is therefore very different from contract can be signed either at the notaire’s
that of a solicitor. office or at the estate agency.
By law, the purchaser can insert clauses into the agreement.
The seller, of course, has to agree to these.
If you are making a purchase with a Arranging the mortgage
mortgage, you should at least instruct the
notaire/estate agent to make your purchase After signing the preliminary contract, the
conditional upon obtaining a mortgage: next step is to formally arrange the
‘conditions suspensives’. This will offer mortgage.
you further protection under French CCF have a range of mortgages specifically
Consumer Law. designed for non-residents wishing to buy a
Upon signing this preliminary agreement the second or even their main home in France.
purchaser has to place a deposit with the A straightforward application form is
notaire, which is normally 10% of the available direct from CCF. The form contains
purchase price and will be deducted from the clear details of the application process
sale price. The property is then taken off the together with the supporting documentation
market. It is better to think of this deposit as that is required.
a payment on account or a penalty for Please return without delay your fully
breaking the contract. Having said this, a law completed application form to our bilingual
passed on 1 June 2000 does grant you a mortgage advisors at CCF head office in
seven-day cooling off period during which Paris. They will be pleased to answer queries
time you can withdraw from the agreement.* in English at any stage of your mortgage
Stamp Duty and registration fees will need application.
to be paid at completion when the agreement Subject to CCF approval of your mortgage
will be filed at the notaire’s office. As a and insurance applications, you will be
guideline, the notaire’s fees, Stamp Duty issued will with a mortgage offer. By law, this
and Registration fees will add up to around offer has to be written in French, but CCF
6% to 8% of the purchase price for existing will provide you with an English translation.
properties. For new properties they
will amount to around 2% to 4% of the
As the French tax and succession regimes are
different from many other countries, to
ensure tax efficiency and problem free
transfers on death you may wish to consider
instructing a solicitor based in your home
country to advise you. See also page 13.
* Although the preliminary contract is binding on both the
seller and the purchaser after this cooling off period, you
should note that the sale will still be subject to the notaire
formally checking the title to the property.
Valuations and surveys The mortgage offer
Depending on the nature of the property, a Upon receipt of your mortgage application,
valuation may be provided by CCF. This will CCF will consider it and respond to you
merely confirm the current market value of directly. Should any details need clarification
the property as collateral for the loan. they will contact you by telephone. Once
your application is approved they will issue
It will not be a comprehensive inspection of
you with an offer. This offer will detail the
the property and is not undertaken to
terms and conditions relating to your
identify any structural conditions or defects.
Only a full structural survey will certify this
(we can arrange one on your behalf). While It is a condition of consumer law in France
more expensive than a standard survey, it that the applicant must wait at least 10 full
may be a small price to pay for your own days before signing and accepting the offer.
peace of mind. Although a vendor must This regulation ensures you have sufficient
certify that a property is free from ‘hidden time to fully consider the terms of the loan
defects’, this provides little reassurance as and the bank has to provide evidence that
they can just plead ignorance. It would be this ‘cooling off’ period has taken place.
difficult to prove subsequently that they were CCF will of course provide you with any
fully aware of any defects. explanations or further information that you
may require. The offer will be held open for
30 days from the date of issue before it
expires. When you return the accepted offer
you will be asked to include the payment for
the bank’s mortgage arrangement fee.
At the same time as the offer is sent to you,
details are sent to the notaire. He can then
prepare for the deed of sale to be signed. The
notaire will then begin his legal duties which
include checking that all the conditions in
the initial contract have been fulfilled.
The length of time between the initial sale
contract and completion can vary but is
normally around two to three months.
Completion is when the final deed of sale is Each page has to be initialled by both the
signed and legal ownership is transferred to seller and buyer and both must sign the last
the buyer. It is at this point that the balance page after writing in French ‘bon pour accord’
of the purchase price plus any extras such as which means they have understood and accept
the notaire’s fees, taxes and duties are due. the terms. There are no title deeds as such in
The monies will be paid directly by the bank France and proof of ownership is provided
to the notaire. and guaranteed by registration of the
property at the Land Registry. The Land
The final act is the signing of the deed of
Registry’s stamp is put on the deed of sale
sale (acte de vente) which will take place in
and the notaire gives a certified copy to the
the notaire’s office. It is normal for both
buyer around two months after completion of
parties to be present when the deed of sale is
read, signed and witnessed by the notaire. It
is good advice to attend in person at the
notaire’s office for the signing and witnessing
of the deed of sale. However, if this is not
possible you may invoke a power of attorney.
As this must comply with strict legal
procedures you should inform CCF at the
earliest possible opportunity if you think you
will be unable to be present in person.
Mortgage product details
CCF are able to provide a range of mortgages designed to cover
the needs of non-residents wishing to buy their main or second
home in France.
CCF will consider mortgages on most types
of property, including those being
• Mortgage Type: capital repayment.
constructed on an individual basis or as part • Mortgage Amount: minimum € 50,000,
of a development. maximum 80% of the purchase price or
the estimated value of the property,
The property should be primarily for your (excluding legal fees),whichever is lower.
own use, although you may wish to let it for
parts of the year to provide extra income. • Total loan repayments on your mortgage
Any rental income will not be taken into and other loans must not exceed 33% of
account when assessing your ability to repay your joint or single net monthly income.
as CCF do not finance transactions purely This guideline is commonly used by
made for investment reasons. Mortgages French banks. Please note that under
are available from CCF subject to the French Law, banks are obliged to
following terms: evaluate the applicant’s capacity to keep
• Applicants must be aged over 18 and
under 60 at the time of the application, • Arrangement fees: generally 1% of
subject to status. the amount borrowed (please ask for
• Please refer to CCF's lending criteria
enclosed at the back of this brochure. • Security required: first legal charge on the
• Mortgage Term: 5 to 15 years.
Flexibility of Repayments
You can alter your repayments, subject to
certain limits, within the term of your loan
to suit changes in your income.
At any time after the first year the monthly
repayments can be adjusted downwards so
long as this does not add more than two
years to the duration of the loan.
Repayments can also be adjusted upwards to
a maximum of double the initial repayment
level. These changes can be made five times
during the life of the loan, subject to at least
one year between each change.
Interest rates French bank account
You have a choice of: Monthly repayments covering both capital
and interest are paid in euro via a CCF bank
• Fixed rate
account. An account with CCF must be
Calculated on the basis of current bond opened before completion of the mortgage.
prices when the mortgage is made, and fixed Payments can be made by a transfer of funds
for the term of the mortgage. from most overseas current accounts to CCF.
Your CCF bank account can be used to pay
In the event of early repayment, a fee
the Direct Debits for taxes due in relation to
equivalent to 3% of the capital outstanding
your property as well as bills for electricity,
at the time will be charged.
telephone and gas.
• Variable rate linked to a benchmark rate
Linked to a benchmark rate of Euribor 1
Life cover is mandatory and is provided by
year. Early repayment of the mortgage can
Erisa*. This insurance pays off all or part of
be made at any time without penalty.
your remaining mortgage in the event of
Additionally, you are protected against a
death. The policy also includes mortgage
significant interest rate rise as you can switch
repayment protection. This insurance will
to a fixed rate at any time. To take advantage
pay all or part of your monthly repayments
of both of the above options you can
if you become ill and cannot work or
arrange your mortgage with a combination
become permanently incapacitated.
of a fixed and variable rate.
• Capped variable rate
It is a requirement of French law that your
Periodic revisions of the terms of the
new home is insured against damage with the
mortgage based on a benchmark rate, with a
policy effective from the same date as the
guaranteed ceiling rate. This is a good
signing of the deed of sale. CCF can arrange
compromise between a variable and a fixed
an ‘Elysees Habitation’ insurance policy
rate since you can benefit from a decrease in
underwritten by CCF with Erisa Iard*, The
interest rates. However, you cannot switch to
insurance will be based on the estimated cost
a fixed rate and in the event of early
of rebuilding the property. It also has an
repayment a fee equivalent to 3% of the
option to include contents insurance.
capital outstanding will be charged.
* Erisa and Erisa Iard are CCF subsidiaries, regulated by the
Current interest rates will be given by CCF French Insurance code.
upon receipt of the ‘in principle’ mortgage
quotation request form enclosed with this
Rates and Taxation
Homeowners in France are liable for two local taxes.
Inheritance taxes may also apply.
Taxe Fonciere CCF can put you in touch with these
professionals who can give you advice to suit
This is a land tax. The size of the property your own specific circumstances. This can
determines how much is paid and owners of include property taxation advice applicable
new properties are exempt for the first two to residents and non-residents.
years. The tax is paid by the person owning
the property on 1 January of each year with French inheritance laws are particularly
payment due in the final quarter of the year. different to those abroad.
However, if the property ownership changes
You are well advised to take legal advice on
then the purchasers must usually reimburse
these matters before completing the purchase.
the sellers for their share.
You may also be liable to French tax if you
derive any income from the property, ie,
This is a local services tax. It covers the letting fees. You must register with the
services and maintenance provided by the French Taxation Centre for Non-Residents
local council and again is payable annually in when you buy the property.
the last quarter of the year. The estate agent France has signed taxation treaties with most
will advise you of the taxes in relation to your countries which means that you avoid double
own property and tell you how much you will taxation.
need to pay. The tax demands will be sent to
the address of the French property and both
taxes can be paid by Direct Debit on a
monthly basis from your CCF bank account.
French inheritance laws and Taxation
These are specialist areas and we strongly
recommend that you seek professional
guidance. For UK residents, CCF has
established a list of UK based solicitors who
specialise in French Property law. They also
have contacts with English speaking notaires
Useful French terms
Acte de vente FNAIM
Deed of sale The initials of the Federation Nationale des
Agents Immobiliers et Mandataires which is
the main French national association of
French estate agent
Assurance multirisques habitation
Household insurance policy for buildings
Exclusive mandate for an estate agent to sell
a property as opposed to a mandat simple
Cadastre which is a non-exclusive mandate.
Code de la consommation A lawyer who is a legal professional and a
French Consumer Code public officer appointed by the Ministry of
Justice to handle the conveyancing of all
Compromis de vente
property sales in France. Notaire’s fees: ‘frais
Pre-contract: bilateral contract binding both
parties to the transaction. It is guaranteed
with deposits that are forfeited if one party Pièce
pulls out. A room
Condition suspensive Prêts réglementés
Reservation clause, eg, agreement only if the Statutory loan entitlements
buyer is granted a loan.
Promesse de vente
Débours Sales promise. This is a contract by which
Disbursement charges laid out by the notaire one person undertakes to sell to another
on behalf on the client in order to pay the person without the latter immediately
different agents relevant to the transaction consenting to buy.
(land registrar, surveyor etc).
Droits de timbre They consist of the notarial fees for the
Stamp duties (fiscal stamp to be affixed on writing of a deed (ie, the notary public’s
every page of the deed of sale). commission) and all legal fees and taxes due
for any real estate transaction.
Valuation or Survey Taxe Fonciere
Mortgage Taxe d’habitation
Local tax for services
Deposit paid by buyer to notary or estate Terrain
agent following a sales promise. Forfeited if Land or grounds
the buyer pulls out of sale.
General information on mortgages offered by CCF for residential
properties in France – Capital repayment
Loan to up to 80% of the purchase price or valuation, whichever is lower
valuation ratio (excluding legal fees)
Minimum amount Euro 50,000
Maximum term 15 years, borrower must be over 18 and under 60 at time
Interest rate fixed rate/variable rate/capped rate
Security first legal charge (mortgage) - The customer’s property in France is at
risk if they do not keep up with the repayments
Repayments – existing property:
Repayment of capital and interest will be required in monthly
instalments. The first instalment will be dependent on the date of
first drawdown of the loan
– property under construction:
The first instalment will be payable within one month of the first
drawdown of the loan. The instalments are based on the amount of
funds released. A maximum of a 12 month deferred payment of
capital may be granted on that occasion
Important: the first legal charge on the property has to be registered
upon signature of the final deed with the notaire
Lender CCF or its subsidiaries (850 branches in France)
Early repayment early repayment fees, if applicable, will be dependent on the type of
– fixed rate/capped rate: In the event of early repayment, a
fee equivalent to 3% of the capital outstanding at the time will
– variable rate: Early repayment of the loan can be made at any time
Survey/Valuation Can be provided by the bank’s panel of surveyors/valuers, with the
cost payable by the customer
Other conditions Insurance:
• Mortgage reducing term insurance mandatory provided by Erisa
• The borrower is required to take out a building and contents
Arrangement fees 1% of the amount borrowed (Please ask for further details)
*CCF group Insurance company
Information- November 2002
Documents required Property details (“compromis de vente”or “contrat de réservation”)
for mortgage arrangement
Evidence of income
• Last three pay slips and a letter from employer confirming salary,
position and length of service (if self-employed, please provide your
last three years’ audited accounts).
• Latest income tax return.
• Evidence of other income (eg, rent agreement or bank statements
for investment income).
• Last three months’ bank statements.
Evidence of Identity (must be certified by an HSBC officer)
• Identification proof – Passport, birth certificate and where
appropriate, marriage certificate.
• Confirmation of address – copy of gas, electricity or phone bill
showing present address (dated within last three months).
Main criteria for mortgage • Net yearly income of more than €40,000 euro and financial
loan approval by CCF investments or savings of more than €20,000 euro.
• Affordability – up to 33% (fixed monthly commitments including
the requested mortgage loan repayments compared to the net
income per month) or a sufficient disposable income.
• Regular and stable income.
This document is a general guideline. Please ask us for further details.
International Business Centre
75419 Paris Cedex 08
Fax: 00 33 1 58 13 17 29
Notes : the information given above is subject to change at the Bank’s discretion and without
Member of the HSBC Group
CCF has a share capital of 377,048,505 €
Registered office :103 avenue des Champs Elysées-75419 Paris cedex 08 -SIREN number :775 670 284 RCS Paris
Bank and insurance broking company incorporated under F law; financial guarantee and professional indemnity insurance in accordance
with articles L.530-1 and L.530-2 of the French Insurance Code.
Approved insurance broker (financial guarantees and insurance of professional civil responsibilities
conform to articles L 530-1 and L 530-2 of the Insurers’ Code).