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 Post subject: What is the law
PostPosted: Sun Feb 12, 2012 1:03 pm 
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I have been asked to find out the correct position on this question - any advice anyone -

Some friends are selling their principle house in France.

They are French resident and have been for 6 years plus. They are staying in France but renting for a while until they find something smaller to buy as they need to downsize.

They bought their first home when they arrived in France & sold it approx 14 months ago and then bought their second primary residence in France. This home they have now decided to sell due to an unexpected and sudden change in family circumstances. There is no mortgage on the property. They bought this home direct from the owners and paid the full asking price.

They have a buyer for this house now.

They have returned to the Notaire whom they bought their home through to conduct the sale for both parties.

After 5 weeks waiting they still have no compromis drawn up. First they are told that the papers have been filed/lost and they are waiting for them to arrive by post in order to make the compromis. Now they are told that before the Notaire will draw up a compromis that full proof of invoicing for works done to the property have to be supplied as the selling price is superior to the purchase price. Until this is received then the Notaire refuses to draw up a compromis.

The Notaire states that by French Law as the purchase price is inferior to the agreed selling price and its under 2 years of ownership, that by French Law they have to supply invoices from French Artisans of work carried out.

Does anyone know if this is true please?

They have actually spent a lot of money on the property which demonstrates that they will only be making approx 12000€. This work has primarily been done with UK companies though. The intention had never been to sell this house but circumstances have made them decide that this is necessary. The work done has been to improve the property for their own use and there is still work to be completed. The new agreed selling price is correct market value, if anything a litle under market price.

Advice urgently appreciated.


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 Post subject: Re: What is the law
PostPosted: Sun Feb 12, 2012 2:50 pm 
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Can anyone advise please? My friends are very upset and confused and I promised I would try to establish to correct lawful situation so they know if this is correct or if they can insist that the Notaire gets on with the Compromis at last. Apparently the Notaire has been very hostile to them and even before asking if they had done any work on the house he was shouting at them about English buying properties and selling them at a profit - even though they are resident and will be staying in France!

It has really upset them.


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 Post subject: Re: What is the law
PostPosted: Sun Feb 12, 2012 3:06 pm 
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As far as I'm aware, what the notaire is asking is relevant only to la plus-value, and has no impact on preparing a compromis. All that stuff is relevant when he's got the dosh in his sweaty mitt and has to pay some of it to the fisc - if appropriate: if the fisc take the view that they're selling their main residence, there won't be any CGT. That can be stablished through the address the fisc send its demands/avis etc. and where they are paying local rates on their main residence.

Tell them to get a new notaire - this one seems to suffering from an overdose of xenophobia.

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 Post subject: Re: What is the law
PostPosted: Sun Feb 12, 2012 3:09 pm 
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I agree : change Notaire. Where are your friends? If you tell us, in terms of dept., maybe one of us can recommend someone.

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 Post subject: Re: What is the law
PostPosted: Sun Feb 12, 2012 3:18 pm 
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My first thought was the same as the above, get them to choose a different notaire - he obviously doesn't want their business.

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 Post subject: Re: What is the law
PostPosted: Sun Feb 12, 2012 3:38 pm 
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Here are some links tiamaria which all show that the notaire is wrong.

http://www.pap.fr/argent/impots/exonerer-la-plus-value-issue-de-la-vente-d-une-residence-principale/exonerer-la-plus-value-issue-de-la-vente-d-une-residence-principale-a1312

and here, a notaires site http://www.paris.notaires.fr/art.php?cID=283&nID=735

and from the govt tax site http://www.impots.gouv.fr/portal/dgi/public/popup;jsessionid=5IXGIVCJVAFJNQFIEIPSFFA?espId=1&typePage=cpr02&docOid=documentstandard_2155&temNvlPopUp=true

If your french isn't up to it I can give you a rough translation.

I would also change to another notaire without hesitation.

clare


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 Post subject: Re: What is the law
PostPosted: Sun Feb 12, 2012 4:30 pm 
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Thank you, they are in Sarthe.

The Notaire has said that
quote
Vous avez acquis votre propriété à un prix très inférieur à celui où vous
envisagez de revendre et ce dans un bref délai (moins de 2 ans).

En l'état actuel de la Loi française, vous devez justifier du prix vendu.

Aussi, vous serais-je fort obligée de me transmettre la copie des factures
des travaux réalisés sur XXXX XXXX XXXXX

end quote

This is before he even asked or knew how much they have spent. He also clearly knows that they are staying in France. They say that they reminded him that it is a principle home but he insists that because of the profit then they MUST proove their works. When the costs are added they make a very small profit only.

They want to move this along as their buyer is asking what on earth is happening and why the delay.

I also feel that they should move Notaires but they are concerned that after waiting 5 weeks for the deeds to be found, that there may be an even longer delay if the Notaire is angered and holds up sending the required documents onto the new Notaire. Would they also have to ask the purchaser - who is obviously paying the fees to move too? What if the Notaire refuses and says that the purchaser has already instructed him to act for the purchaser - which to all intents & purposes he has as it was a decision to use just one Notaire? What if the retained Notaire then caused delays and disturbance? These are the things they are worried about.

Thank you for the advice, I will pass it on. The Notaire seems to be saying that it is because they are selling the house in under two years since purchase but it is their second principle home, having sold the previous one.


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 Post subject: Re: What is the law
PostPosted: Sun Feb 12, 2012 4:45 pm 
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I did raise the question when we sold our first maison principal, about 4 years ago. I'm fairly sure that at that time the notaire said the law had recently changed :-?

What I know he said is that the notaire likes you to have lived in the property for 8 months to a year, simply because it normally takes that time to establish documentation proving you live there, as in a tax return etc.

The only reason I can think of for him asking for proof is if he suspects that they purchased the property at a knock down price to avoid higher charges/taxes :-?

I hope they can get it sorted and as the buyer is paying the notaire costs perhaps they can put some pressure on him.

clare


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 Post subject: Re: What is the law
PostPosted: Sun Feb 12, 2012 4:55 pm 
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Thanks - They have lived in it for 14 months and had no intention of selling, its only come about due to an unexpected change in circumstances apparently.

They paid the full asking price and never asked to negotiate, so it wasn't knockdown price either.

Pre costings of work done it looks a substantial profit but post costings its less profit than the notaires fees.

The Notaire said they also have to have another diagnostic done but I also thought this unusual in such a short time lapse.


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 Post subject: Re: What is the law
PostPosted: Sun Feb 12, 2012 6:08 pm 
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This may have changed recently, but in the past there was a presumption that if someone bought and sold too quickly, especially at a profit, then they were acting as a marchand des biens, i.e. running a business, even if they had lived in each house as their main home. Off the top of my head, I think it was anything under 2 years in a house which was seen as potentially suspect, presumably because the French normally move house so infrequently, if at all.

Not sure this helps practically, but it may explain something of the Notaire's mindset and hostility.

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 Post subject: Re: What is the law
PostPosted: Sun Feb 12, 2012 6:13 pm 
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Thanks for all this advice. Oh I hope that the Notaire does not think that, I know these people and they are very sad at having to make this decision. I know it was a lifetime home but their situation has forced this decision. Wonder how you prove that in France!

So perhaps I should advise that they take the invoices along and wait some more time.


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 Post subject: Re: What is the law
PostPosted: Tue Feb 21, 2012 6:52 pm 
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Was just wondering if they've got anywhere with the notaire?

clare


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 Post subject: Re: What is the law
PostPosted: Tue Feb 21, 2012 7:15 pm 
I would also say that the notaire suspects them of property development, which should be taxed accordingly. It is not an unreasonable question for him to ask, but you could find a more sympathetic notaire. If it is the first short term sale then I would say that the notaire is being more officious than you would normally expect. I dont think there will be a problem as long as the UK companies have complied with their obligations for working in France.


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 Post subject: Re: What is the law
PostPosted: Tue Feb 21, 2012 8:41 pm 
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Tiamaria wrote:
The Notaire states that by French Law as the purchase price is inferior to the agreed selling price and its under 2 years of ownership, that by French Law they have to supply invoices from French Artisans of work carried out.

Surely it is possible that these people could buy a run down property, spend 18 months doing it up themselves and then, due to circumstances beyond their control, be obliged to sell, without it being assumed they are selling to make a quick buck ?

If they have done the work themselves, they will not necessarily have invoices for materials purchased - they would certainly not have them for the labour!

I find this from the notaire extremely difficult to comprehend :

Quote:
The Notaire has said that
Vous avez acquis votre propriété à un prix très inférieur à celui où vous
envisagez de revendre et ce dans un bref délai (moins de 2 ans).

En l'état actuel de la Loi française, vous devez justifier du prix vendu.

Aussi, vous serais-je fort obligée de me transmettre la copie des factures
des travaux réalisés sur XXXX XXXX XXXXX


This is before he even asked or knew how much they have spent. He also clearly knows that they are staying in France. They say that they reminded him that it is a principle home but he insists that because of the profit then they MUST proove their works

As MAD states, there is no CGT on a principal residence, so why is the notaire insisting on proof of the works? How does he expect them to be able to produce invoices they don't have?

It sounds like French bureaucracy going over the top and trying to find something that simply isn't there.


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 Post subject: Re: What is the law
PostPosted: Thu Feb 23, 2012 10:47 pm 
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Here's the update

The Notaire is going to be changed.

It seems there are NO French laws concerning this situation and the sellers are within their rights, genuine and everything is in order. However there were certain words today that could be seen as racist even. (I am not at liberty to explain these comments but they were against the purchaser who is not a French National but nevertheless entirely genuine.) They were also told that the situation was extremely 'rare' in France that someone would buy and sell a house within 2 years.

The point was raised that the Notaire felt that the previous owners should be informed and entitled to a share of the profit. However the profit, if any at the end of all this, is so small and it would be argued that they paid full asking price when they bought it and never negotiated or offered on that price. They just accepted the asked price. The sale price now is also less than the market value price so how they can be brought to task is unbelievable!

There is nothing the Notaire can fairly claim except that it is 'rare' to sell a principle home within 2 years. It seems a matter of culture and acceptance of the situation as genuine by this Notaire, who is very rural and traditional, rather than French Law.

Lets hope it all moves forward smoothly from now on.

Thank you so much for the responses and advice.


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 Post subject: Re: What is the law
PostPosted: Fri Feb 24, 2012 7:02 pm 
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Thanks for the update Tiamaria, hope it goes well for them.

clare


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 Post subject: Re: What is the law
PostPosted: Fri Feb 24, 2012 7:25 pm 
tiamaria wrote:
The point was raised that the Notaire felt that the previous owners should be informed and entitled to a share of the profit.


That I have heard of before.


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