How do we buy out our friends’ share of French property?

Question: In 2004, we and another couple made a cash purchase of a French property as a second home. We now wish to buy out our friends. Each couple agreed to give the other first refusal at market price. What can we do to make this a smooth transition? All bills are already in our name, tax/ utilities etc. Is it sufficient to employ a notaire or do we need an estate agent? What taxes and fees can be incurred by either party?

As you have agreed, the transfer must be for market value. This is where you will need an estate agent, to produce a written valuation.

The notaire’s fees which include the French land registry taxes, are based on the value of the part of the property changing hands. Your friends should consider their CGT liability in both France and their country of residence.

For this amicable transaction, the parties can agree to waive the requirement to produce the file of reports (dossier de diagnostic technique), necessary for a sale, which provide information as to the condition of electrical and/or gas installations, termites, risk of asbestos or lead exposure, etc, as applicable.

The formalities and timescale are lesser than for a sale. There is no requirement for you to be given a cooling off notice nor for a contract stage, so you can proceed straight to the transfer deed (acte de licitation).

In our experience, the more information you agree, gather and provide to the notaire at the outset the smoother the transfer.

In addition to the estate agent’s estimate, confirm the price agreed by the parties. Ensure you are up to date with all payments for local taxes, utility bills, insurance, etc and make plans for taking meter readings and making pro-rata payments on completion. Prepare to update your insurer about the change of ownership. Produce a summary of any works which have been carried out and provide receipted invoices. Expect to pay the purchase price in Euros via the notaire’s account, if you hope to be able to keep the purchase price in sterling, discuss this at the outset.