Today is: 30 July 2010
by David Anderson, French tax and property solicitor at Sykes Anderson LLP
Please note that taxation and national insurance is a complex subject and you should not take or refrain from taking any step without full independent advice on the particular facts of your case. The content of this article is of a general nature and no liability is accepted in connection with it.
Buying newbuild property off-plan can be an attractive investment. Much newbuild property, throughout France, has increased greatly in value over the last few years leaving big smiles on the faces of those who bought it. Provided the correct safeguards are put in place, there is no reason why you should not invest in this kind of property and, indeed, there are many advantages to doing so, not least, on the practical level, your potential ability to influence the exact design of the property.
As the demand for quality new-build is high most buyers are required by the developer to exchange contracts (sign the contrat de réservation) at great haste for fear of losing out altogether. Most UK buyers do exactly this relying on the developer's reputation.
However, don't expect the developer to spend too long talking about VAT, or the notaire to notify you about what happens if the developer goes into liquidation. The notaire - usually the only notaire acting on the sale - the developer and the selling agent often have a common interest in making the sale. The notaire is unlikely to want to upset a developer who is referring many conveyances to him.
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Sykes Anderson can advise and act on sales "off plan" and help to protect your position.
Please contact David Anderson by email or on 020 3178 3770.