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PROPERTY

Explained: The new rules for selling houses in France

From September 2022, anyone who wants to sell an older house in France may have to pay for a €700-800 energy audit of their property.

Published: 21 December 2021 16:28 CET
Updated: 25 May 2022 11:33 CEST
Snow covers a house in eastern France. The government is set to make it harder for people to sell energy inefficient housing from September 2022.
Snow covers a house in eastern France. The government is set to make it harder for people to sell energy inefficient housing from September 2022. (Photo by SEBASTIEN BOZON / AFP)

The regulations form part of the Climate and Resilience law and will come into force in September 2022. 

Currently, if you plan to sell or rent a property in France, you need to provide a diagnostic de performance énergétique (DPE), which is a document that serves as an estimate for the property’s energy consumption.

Depending on the result of the DPE, your property will be ranked from A (the most energy efficient) to G (the least energy efficient). 

Source: ecologie.gouv.fr

In France, properties that fall into the F and G categories are known as passoires thermales – or heat sinks. According to Le Parisien, some 4.8 million properties in France fall into this category, generally older properties or those in poor repair. 

The cost of obtaining a DPE generally ranges between €100-250 depending on the size of the property and when it was built. You can find a certified list of DPE providers here and here. 

So what changes? 

From September, anyone who want to sell a property that is ranked in the F or G categories (ie those that are projected to need a minimum 330 KWh/m2 of energy per year) will also need to pay for an audit énergétique. 

This is like a far more precise version of the DPE and aims to inform future buyers not only of the likely energy bills but also of the cost of renovations needed to make the property fall into the B class. 

Real estate experts are worried that there will not be enough trained professionals to carry out the audits énergétiques. The implementation of this new requirement was supposed to go ahead in January 2022 and has already been pushed back by eight months. 

The cost of an audit énergétique falls on those who are trying to sell and is estimated at around €700-800. 

If you are considering renovating a property in France to make it more energy efficient, this is a good time to do so. The government is backing zero percent interest loans and other measure to make it economical to do so. You can read more about these measures HERE. 

There is also another incentive: if your property is seriously energy inefficient (requires more than 450 KWh/m2 per year), you will not be allowed to rent it out from 2023. 

Eventually, the audit will also apply to homes in the E class, as of January 1, 2025, and then later to homes in the D class from January 1, 2034.

Who can carry out the audit?

As of early May, the French government released its requirements for who is certified to perform these services, which differs based on whether you live in a ‘multi-dwelling residential building’ or an ‘individual house.’ 

For the former, you can either use an engineering firm with a specific qualifications (this is called a “OPQIBI 1905”) or registered architects. For individual houses, you can also use qualified engineering firms (in this case, called a “OPQIBI 1911”), as well as  companies certified with “RGE offre globale” and certified home inspectors. For more information, read HERE.

Member comments

  1. There is also another incentive: if your property is seriously energy inefficient (requires more than 450 KWh/m2 per year), you will not be allowed to rent it out from 2023

    Does this count for gites also? or only for main residences?

  2. Welcome to North Korea. France is one of the most controlling countries in the world. Over the last five years it’s gone worse, and it’s all down to the inexperienced people Macron has appointed.

  3. Regarding this specific issue Boggy – incentivizing renovation works/raising awareness of the climate impact of “heat sinks” via mandatory energy analyses – it seems a tad far fetched to invoke North Korea as a comparison. France is one of the few countries actively mobilizing its citizens (from the proactive to the sluggish) in waking up and taking action in every regard to combat the climate emergency. Yes, an energy audit is annoying and expensive and there will be people who find the extra cost an unfair burden. Yet it is a minuscule and temporary inconvenience in the grand scheme of what is necessary to implement to have a chance at limiting runaway emissions and a rapidly heating planet. If we had all taken personal responsibility and done what we could privately to help make our homes efficient/recycle etc etc the government wouldn’t have needed to nanny us through it in the first place. I would love to live in a world that didn’t need onerous and patronizing regulations/carrot and stick incentives and red tape but unfortunately people have proven themselves too stupid and selfish.

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PROPERTY

French property: What is buying ‘en tontine’?

If you're buying property in France, you might be thinking about buying 'en tontine' - this has advantages especially when it comes to France's strict inheritance laws, but can also have tax implications.

Published: 25 March 2024 11:17 CET
French property: What is buying 'en tontine'?

What is it?

The ‘clause de tontine’ sometimes also known as a ‘clause d’accroissement’ is a clause that is inserted into the property deeds when you are buying a house or apartment.

It can only be inserted during the purchase, and cannot be added later.

It’s basically a ‘group purchase’. It’s most commonly used by unmarried couples who are buying together but it can be used by larger groups too – for example a group of friends buying a holiday home together.

You will have to ask a notaire to draw up the tontine clause during the property purchase and it can only be used if 

  • the parties are equally involved in the financing of the purchase
  • the parties involved have a roughly equal life expectancy (for this reason tontine clauses may be rejected if there is a significant difference in age between the purchasers)

What’s the point of it?

The main reason that people use it is to sidestep France’s strict inheritance laws, which assign that a certain portion of every estate must go to children, at the expense of a partner. 

READ ALSO How France’s strict inheritance laws work

For this reason it is particularly used by couples who have children from previous relationships.

On a property with a tontine clause in effect, when one owner dies their share of the property passes in its entirely to the other member/members of the tontine.

This cuts out children from inheritance, but means that a surviving partner is not evicted from their home in favour of the children of the deceased. 

It also has the advantage of making the intentions of the deceased clear, to avoid arguments among heirs after their death.

It should be noted, however, that the tontine clause only takes in the property that it covers – other assets may be subject to French inheritance law so it’s therefore probably wise to arrange a will, to ensure your wishes for your estate are met.

The surviving party can ask a notaire to update the property deeds to show that they are the sole owner, if they want. Be aware there will be a fee, which could reach four figures for the privilege – and it doesn’t actually involve any change to the property title.

Drawbacks

The advantages of the system are clear, especially for blended families, but there are some potential drawbacks too, which mean that anyone considering buying in this way would be well advised to take proper legal advice before they start.

Inheritance tax – while a tontine will help you to avoid restrictions on inheritance, it does not exempt you from inheritance tax. French inheritance tax is structured according to your relationship to the deceased, and people who are neither married nor related to the deceased pay an eye-watering inheritance tax rate of 60 percent.

The only exception to this top rate of inheritance tax is if the property is your main residence and it is valued at under €76,000 – in that case, tax is paid at a rate of 5.8 percent.

Married couples and family members pay a much lower rate or not tax, but if you’re not married to your tontine co-purchaser, be careful that you’re not lining yourself up for a massive tax bill in future years.

Wealth tax – depending on the value of the property, it could tip you over into the ‘wealth tax’ category when you inherit. France’s wealth tax is a real estate based tax and is levied on anyone who has real estate assets (property and land) worth €1.3 million or more.

The calculation includes property held en tontine.

Tax savings – you might hear tontines being advised as a way to limit your French tax liability.

While this used to be true, changes to tax laws means there are no no significant tax advantages to buying this way – the same is true for buying a property via an SCI, which used to represent a tax saving until the law was tightened up.

Disinheriting family members – One side effect of the tontine clause on mixed families is to effectively disinherit any children of the first person to die.

Because the property passed to the survivor, under French law, only their direct descendants – rather than any family by marriage – are entitled to automatic inheritance.

That means that the children of the surviving partner will be entitled to the statutory share of the entire asset (between 25 and 30 percent depending on the number of children), but the children of the first person to die will be entitled to nothing. Obviously you can choose to leave them something in your will, but you can only leave them some or all of the estate which is not automatically given to the children on the survivor.

Divorce/dispute – if the members of the tontine split up or (in the case of friends) fall out, then they can either sell the whole property or agree to buy each other out.

However, if one party refuses to sell, then you have very limited legal options – unlike a standard property purchase a tontine is not regarded as joint ownership, so one partner cannot be forced to sell as part of a divorce procedings, for example.

Basically the tontine can only be ended or changed with the agreement of all parties – so if you can’t agree between yourselves then you may be stuck with it.

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