French Property Law and Ownership Types

A comprehensive guide for buyers, investors and expats

France has one of the most structured and protective property systems in Europe. For those relocating through your A New Life in France platform, understanding how French property law works — and the different ownership structures available — is essential before making an offer.

This guide explains:

• The legal framework governing French property

• The role of the notaire

• Freehold vs leasehold in France

• Joint ownership options

• Company ownership structures (SCI and others)

• Inheritance implications

• Marital property regimes

• Tax considerations

1. The Legal Framework of French Property Law

French property law is based on the Napoleonic Civil Code (Code Civil), introduced under Napoleon Bonaparte in 1804.

Key principles include:

• Strong protection of property rights

• Strict inheritance rules (forced heirship)

• Written, formalised contracts

• Central role of state-appointed legal officials

Unlike common law systems (UK, US), France operates under civil law, meaning:

• Legal processes are codified

• Case law plays a smaller role

• Contracts must follow strict statutory formats

This creates a system that is highly secure — but also formal and procedure-driven.

2. Freehold vs Leasehold in France

Freehold (Pleine Propriété)

The vast majority of French property is sold as freehold (pleine propriété). This means:

• You own the building

• You own the land

• There is no ground rent

• There is no landlord

This is different from England and Wales, where leasehold is common.

Leasehold (Bail Emphytéotique)

Rare in residential property, but sometimes used for:

• Commercial property

• Agricultural land

• Municipal developments

These leases can last 18–99 years and grant extensive rights but ultimate ownership remains with the landowner.

3. The Role of the Notaire

Notaires de France play a central role in every property transaction.

They are:

• Public officials

• Appointed by the French Ministry of Justice

• Required for all property transfers

Their responsibilities include:

• Drafting the Compromis de Vente (pre-sale contract)

• Conducting title searches

• Verifying planning compliance

• Calculating taxes

• Registering ownership with the Land Registry

• Collecting and paying transfer taxes

Important:

The notaire does not act for the buyer or seller — they act for the State to ensure legality.

4. The French Property Buying Process (Legal Overview)

1. Offer accepted

2. Compromis de Vente signed

3. 10-day cooling-off period (buyer only)

4. Due diligence period (2–3 months)

5. Mortgage approval (if applicable)

6. Signing of Acte de Vente (final deed)

7. Funds transferred

8. Ownership registered

Ownership legally transfers on signature of the Acte de Vente.

5. Main Ownership Types in France

A) Sole Ownership (Achat en Nom Propre)

• Property owned by one individual

• Simplest structure

• Full control and full liability

Best for:

• Single buyers

• Straightforward purchases

• Simplicity

Inheritance rules will apply automatically unless structured differently.

B) Joint Ownership – Indivision

Indivision is the default structure when two or more people buy together.

Each owner holds a percentage share (e.g., 50/50, 70/30).

Key Features:

• All major decisions require unanimous consent

• Any co-owner can force a sale

• Shares pass to heirs on death

This structure can create complications in family disputes.

Best for:

• Married couples

• Simple joint purchases

• Short-to-medium-term ownership

C) Tontine Clause (Clause d’Accroissement)

A tontine is a special clause in the purchase deed.

How it works:

• On death of one owner, the survivor automatically becomes full owner

• Property does NOT pass to heirs

• It bypasses normal inheritance rules

Important: It is treated legally as though the surviving owner always owned 100%.

Best for:

• Unmarried couples

• Blended families wanting survivor protection

But:

• Difficult to reverse

• Can create inheritance tax complications

D) SCI – Société Civile Immobilière

Société Civile Immobilière (SCI) is a French property holding company.

Instead of owning the property directly, you own shares in the company, and the company owns the property.

Advantages:

• Flexible inheritance planning

• Easier transfer of shares

• Structured family ownership

• Avoids indivision problems

• Useful for rental property

Disadvantages:

• Administrative requirements

• Annual accounts

• Setup costs

• Potential tax complexity

Best for:

• Family estates

• Investment property

• Multi-generational planning

• UK/US expats needing succession flexibility

This structure is commonly used by international buyers relocating to France.

E) Démembrement – Split Ownership (Usufruit & Nue-Propriété)

French law allows ownership to be split into:

• Usufruit – right to use and receive income

• Nue-Propriété – bare ownership

Example: Parents keep usufruit (live in property)Children hold nue-propriété (inherit later automatically)

On death of usufruit holder:Full ownership consolidates automatically.

This is powerful for:

• Inheritance tax planning

• Estate structuring

• Wealth transfer during lifetime

6. Marriage Regimes and Property Ownership

Marriage affects property ownership in France.

Common regimes include:

1. Communauté Réduite aux Acquêts (Default)

• Assets acquired during marriage are joint

• Pre-marriage assets remain separate

2. Séparation de Biens

• Each spouse owns their own property

3. Communauté Universelle

• All assets shared

For expats, the applicable regime depends on:

• Country of marriage

• Residency

• Election of regime

Professional advice is essential when relocating.

7. Inheritance and Forced Heirship

French inheritance law includes forced heirship (réserve héréditaire).

Children are entitled to a fixed portion of your estate.

Example:

• 1 child → must receive at least 50%

• 2 children → 66%

• 3+ children → 75%

You cannot freely leave 100% to a spouse unless structured carefully.

EU Regulation 650/2012 allows some expats to elect the law of their nationality to apply — but tax rules still follow French law.

8. Property Taxes and Legal Costs

Purchase Costs (“Notaire Fees”)

• 7–8% for resale property

• 2–3% for new-build

Includes:

• Transfer tax

• Registration fees

• Notaire remuneration

Annual Taxes

• Taxe foncière (property ownership tax)

• Taxe d’habitation (now mostly abolished for primary residences)

Capital Gains Tax

Applies to:

• Second homes

• Rental property

• Non-residents

Exemptions apply after long-term ownership.

9. Co-Ownership in Apartments – Copropriété

Fédération Nationale de l'Immobilier explains that most apartments operate under copropriété law.

This means:

• You own your apartment privately

• You co-own communal areas

• You pay annual service charges

• A syndic manages the building

Rules are governed by:

• Règlement de copropriété

• Annual general meetings

• Majority voting rules

Buyers must review:

• Minutes of meetings

• Building accounts

• Planned works

10. Buying Through a Company (Non-SCI)

Foreign companies can buy French property, but:

• Additional reporting obligations apply

• Anti-money laundering rules are strict

• Beneficial owners must be declared

Corporate ownership is typically used for:

• Commercial property

• Investment portfolios

• Development projects

11. Key Risks for Foreign Buyers

• Indivision disputes

• Inheritance conflicts

• Unplanned tax exposure

• Poor structuring

• Ignoring matrimonial regime

• Not understanding forced heirship

For UK buyers especially post-Brexit, visa status and residency can impact long-term planning if the property becomes your primary residence.

12. Choosing the Right Structure

Situation	Suggested Structure
Married couple relocating	Indivision or marital regime planning
Unmarried couple	Tontine or SCI
Family investment	SCI
Estate planning priority	SCI or démembrement
Simple retirement home	Sole ownership
Rental portfolio	SCI (possibly IS tax option)

French property law is:

• Highly protective

• Procedural

• Structured

• Inheritance-driven

For expats — especially those building a retirement life in France — ownership structure is just as important as location.

The right legal structure can:

• Protect a surviving partner

• Reduce inheritance conflict

• Simplify succession

• Improve tax efficiency

• Prevent forced sale disputes

Before signing a compromis de vente, always consider:

• Who should legally own the property?

• How will it pass on death?

• What tax regime applies?

• Does an SCI make sense?

• Does your marriage regime need reviewing?

A well-structured purchase is not just about buying a home — it is about building security for the future.