Buying in Nice when you are not resident: the process, not the clichés

Can a foreigner buy freely in France?

I am often asked the same question, in different languages: 'Is it complicated to buy in your country when one lives elsewhere?' The honest answer is no, but the French process has its own logic, and it is better to understand it before making an offer than during.

Yes, a foreigner buys freely. France does not make the acquisition of property conditional on nationality or residence. A buyer from Milan, London or Geneva buys according to the same rules as someone from Nice. This is the point I repeat most often, because many clients arrive with experience of countries where the foreigner must obtain authorisation, go through a local structure, or renounce full ownership. Nothing of the sort here.

One nuance, however: buying is free, staying is not. Owning a flat on the Promenade des Anglais confers no right of residence. Questions of visa and duration of presence fall under a different law, and a different adviser.

The contract itself will be drafted in French, this is the language of the acte authentique. The notaire can call upon a sworn translator when the buyer does not master the language, and this is a precaution I recommend without hesitation: one does not sign what one does not understand.

How long does a purchase take, from offer to keys?

Longer than one imagines from abroad, less long than one fears once started. Between the accepted offer and the signature of the acte authentique, one must allow several months, the time for the notaire to gather the planning documents, clear any pre-emption rights and verify the situation of the property. With bank financing, the timeline extends by the loan processing period. The notaire's office remains best placed to give a realistic timeline, case by case.

The sequence itself does not vary. First the purchase offer, written, which sets the proposed price and is binding once accepted by the seller. Then the compromis or the promesse de vente, the preliminary contract, where everything is decided: conditions precedent, deposit, annexed diagnostics. Next comes the buyer's statutory cooling-off period after signing the preliminary contract, of which the notaire will specify the duration and procedures. Finally the acte authentique, signed at the notaire's office: the funds are transferred, the keys are handed over, ownership is transferred.

A practical detail that changes everything for a non-resident: it is not necessary to be physically present at each stage. The power of attorney, established in the required forms, allows one to be represented at the compromis as at the acte. The notaire will indicate the form required according to the country where it is signed.

What happens between the offer and the compromis?

This is the most intensive phase, and the least visible. The agency gathers the technical diagnostics, the copropriété documents, the minutes of general meetings. For an old building on the seafront, and they nearly all are, these documents tell the real life of the building: works voted, charges, proceedings underway. I advise my clients to read them, or to let me summarise them, before signing anything.

The compromis also sets the conditions precedent. The most common protects the buyer who is financing by loan: if the loan is refused under the conditions provided for, the sale falls through and the deposit is returned. For a non-resident, the drafting of this clause merits particular attention, French banks do not process a foreign file at the same pace as a local file.

The deposit, paid on signing the preliminary contract, is held in escrow, generally at the notaire's office. It never passes through the seller or the agency. Its amount is fixed in the preliminary contract; again, it is the notaire who frames the practices.

What is the notaire for, exactly?

For virtually everything that makes the sale incontestable. The French notaire is a public official, appointed by the State. He is not one party's solicitor: he acts for both, verifies the origin of ownership, the absence of unsettled mortgages, easements, planning compliance. It is he who receives the funds into an escrow account, he who publishes the sale in the property register, he who collects for the State the transfer duties, what are called by shorthand the 'notaire's fees', the bulk of which is not his remuneration but tax. The applicable rates and scales are published by the administration, and the office provides the detail before signature.

A foreign buyer has moreover the right to choose his own notaire, in addition to the seller's, at no extra cost: the two offices then share the fees. For a file with an international dimension, foreign matrimonial regime, succession to anticipate, holding structure, I recommend it systematically. Certain offices in Nice are accustomed to cross-border files and this shows in the fluidity of the timeline.

Can one borrow in France when one is not resident?

Yes, but not everywhere and not on the same terms as a resident. Some French banks lend to non-residents, others refrain; those that lend generally require a larger deposit and examine closely the source and stability of income. Rules vary according to the borrower's country of residence and the currency of his income, hence the value of a broker or banker accustomed to this segment to know the current terms.

Two pieces of advice from practice. First, have one's file pre-qualified before making an offer: a seller in Nice will always prefer a slightly lower offer but solidly financed. Second, anticipate the movement of funds, international transfers to the notaire's account are subject to verification of the origin of funds, and a badly prepared transfer can delay a signature.

What should one know about taxation, without making a novel of it?

I shall keep to my place: I am not a tax adviser, and this subject cannot be treated in a few paragraphs. But a non-resident buyer must bear in mind the existence of four layers, in order to ask the right questions of his adviser.

Transfer duties, paid once, on purchase, via the notaire. Taxe foncière and, depending on the use of the property, taxe d'habitation on second homes, paid each year. IFI, wealth tax on property, which concerns property assets located in France above a certain threshold, including for non-residents, on their French properties only. Finally, on resale, possible taxation of the capital gain, the treatment of which depends notably on the tax treaty between France and the country of residence. Thresholds, rates and regimes evolve: they are verified with the administration and your adviser at the time of the project.

The right method does not change: before signing, an appointment with the notaire and, for structured estates, with a tax lawyer knowing both jurisdictions. The cost of this consultation is not comparable to that of badly conceived ownership.

Garen Ajderhanyan assists French and international buyers on the seafront in Nice. This article describes the purchase process in its broad lines; it does not constitute legal advice or tax advice. Each situation calls for the opinion of a notaire and, where appropriate, a tax adviser.