Buying an Apartment in Paris

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When selling a property in France, the seller is obliged to provide the results of 8 required diagnostic examinations of the property such as:

• size
• any evidence of lead, asbestos or parasites
• electricity installation
• natural gas installation
• property’s insulation assessments and gas emission
• presence of natural/environmental risks

These inspections are purely informational: the seller has the obligation to inform the buyer, but no obligation to correct any problems that are revealed.

Licensed companies that certify their results perform the tests. If they prove to be incorrect, you will have recourse for compensation.

In order to make an educated decision on the purchase of your property, these inspections need to be read and understood in conjunction with the last 3 annual co-owners’ meeting minutes.

That depends:

No
Not when a property is sold through an agency. When an agency sells a property, the asking price is contractually defined as the maximum price. As soon as an offer is made at this price (without a conditional loan clause), the seller is legally obligated to accept it, eliminating the possibility of bidding wars.

Yes
When a property is sold directly by an owner, there are no laws or regulations, and bidding wars can result. This contradicts the common misperception that you can “get a deal” by buying a property that is sold without an agency.

Closing costs are paid by the buyer. The buyer should expect to pay fees and taxes of approximately 7,7% of the purchase price. These break down roughly as follows:

• Land Registry taxes, or stamp duty, of 5.81% in Paris, plus the land registry tax of 0.10%.
• Miscellaneous expenses – calculated according to various documents that the notary researches and examines in order to draft the deed of sale. These usually amount to less than €800.
• The notaries service fee is approximately 1% of the selling price, including VAT. If the buyer purchases with a mortgage, this amount is slightly higher. The additional cost depends on the amount of the loan

The amount of property tax depends on a number of factors, such as the average rental value and an index individually defined by each neighbourhood (“arrondissement”). As a rule of thumb, it comes out to between 10€ – 20€ per m2 depending on the size of your property, i.e. the larger the property the lower the amount per m2. The occupancy tax depends on a number of criteria (size, neighborhood, but also number of people living in the property and total income), and therefore is quite variable. However, it is generally comparable to the amount of the property tax.

At the closing, in addition to the net property price & agency fees, the notaire will establish a precise accounting of any taxes and charges due by the seller and the buyer according to their pro-rata ownhership of the property :

• The building charges of the current quarter will be settled by both parties according to what was paid or is still due, i.e. if the seller has already paid the building charges of the current quarter, the buyer will reimburse the latter the share part calculated on the number of remaining days in that quarter. If the seller is behind in paying building charges, the amount due will be deducted directly from the purchase price and paid to the building manager, so that the buyer starts with a clean slate. If the closing happens exactly at the end of the quarter, the buyer will pay the upcoming building charges directly to the building manager (« syndic ») .
• The reserve fund is usually not more than a few hundred euros per co-owner, depending on the size of the property. In most cases, the building manager (« syndic ») keeps the seller’s contribution to the reserve fund, and the buyer reimburses the seller the equivalent amount at the signing. Some building manager prefer to pay back the seller and ask the buyer to pay them that same amount.
• Ownership Taxes : There are two taxes, property tax and occupancy tax. Both are owed by the person living in and/or owning the property each January 1st. While the occupancy tax is paid by the person living in the property at that date (owner or tenant), the property tax is paid solely by the owner. At the closing, the buyer reimburses the seller the pro-rata amount of tax between the sale and the end of the year. It is only the year following the closing that the buyer will receive the tax bill and pay it directly.