Expert Insights: Common Challenges of French Property Ownership

Our Head of French Legal Services, Matthew Cameron, answers some common questions about French property.

1. I am hoping to buy a rural property in southern France. Having received a draft of the contract, I was concerned by a clause saying that if the property is destroyed by fire, I may not be able to have it rebuilt. What does this mean?

Hopefully, this warning will never be of any relevance to you. It is, however, a relevant point. Provided a property is built in accordance with planning permission, if it suffers any major damage, there is a presumption that it will automatically be possible to rebuild it to the same specification, without there being any need to apply for a new planning permission.

However, if planning permission was not issued – or not fully respected – then it may not be possible to reconstruct entirely in the same format. One can see the importance of ensuring that a construction conformity certificate is obtained following completion of works.

That may be even more relevant in the case of a rural property. It is quite likely that land will be designated as being non-constructible or agricultural. In either case, the ability to rebuild a property may be strictly limited, and certainly harder than might be the case in an urban development area.

So check that the property was built in accordance with a planning permission, and that certificate of conformity is issued.

2. My partner and I live in France. We want to leave our estate to each other when the first of us dies. I know that we need to do something to avoid high inheritance tax, but my partner does not want to marry: he has bad memories of his marriage breakdown and how it affected him and the child he had with his ex-wife.

If you have not yet bought your French home (you might currently be in rented accommodation), you could think about including a tontine clause in the ownership structure for the house. A tontine clause ensures that the house would pass to the survivor of the two of you.

Presumably, though, you already own the property, so this option would not be suitable for you: a tontine clause can only be added at the time of purchase. Thus, the most likely option would be for you to leave your respective share to the survivor in your Wills.

This does not, though, avoid exposure to French inheritance tax. If you are not married or have not completed a civil partnership agreement (a CPA in the UK or PACS in France), then at the time of the first death, the survivor of the two of you will be obliged to pay French inheritance tax at 60% on the half share left by the deceased.

To avoid the inheritance tax on assets passing between you two, you will either have to marry or enter into a Civil Partnership.

Even if you overcome the inheritance tax challenge, you will need to consider the rights of your partner’s child. I am presuming you have no children of your own. You must remember that in nearly all cases, anything you may leave to your partner’s child would also be subject to 60% tax, as you are not related. And on top of that, as you live in France, that child may have a right to claim compensation from you if your partner does leave everything to you.

The inheritance law and tax rules can be extremely complex. They do require detailed consideration from experienced lawyers.

3. My ex-husband and I have recently divorced. The court in England ordered that he transfer his half of the French house to me, but the notaire has told me that our divorce court order is not recognised. What do I do?

The notaire is broadly correct. Since the UK left the European Union, judgments handed down from a court in the UK will not be automatically valid in an EU country. This may change in the future, for example, if the UK were to be admitted to join an existing international treaty on recognition of judgments.

Until then, to have an English court order recognised and implemented in France, it will first need to be presented to a French court for an extra legal procedure. Only once a French judge has reissued the court order can it be submitted to the notaire with a requirement to have your ex-husband’s half share of the French property transferred to you.

Any cross-border legal action will inevitably be relatively complex. This extra process would only further complicate what has surely been a difficult time for you.