When you sell, the notaire repays your French mortgage from the sale price and arranges the release of the bank's charge. Early repayment charges are capped by law and not due in some cases, such as a sale following a work-related move. Non-residents pay French capital gains tax, reduced for each year of ownership, and residents outside the EU and EEA usually need an accredited fiscal representative. The net proceeds then have to be converted and sent abroad.
Repaying the mortgage on sale
You do not need to repay the loan before you sell. At completion, the notaire uses the sale price to repay the capital outstanding, then arranges the release of the bank's charge on the property (mainlevée). Ask your bank for a redemption statement early, so the notaire has the figure in time.
If the price does not cover the capital outstanding, the difference has to be found before completion, or the charge cannot be released. You do not need to visit the bank: the notaire deals with it directly.
Early repayment charges
The bank may charge an indemnity, capped by law at six months' interest on the amount repaid and at 3% of the capital outstanding. It is not due in certain cases set by law, such as a sale following a work-related move, and many loan offers waive it altogether. Check your offer.
Capital gains tax for non-residents
A gain on the sale of French property is taxed in France, with social charges, whatever country you live in. Relief applies for each year you have held the property, so the tax falls the longer you own it. The notaire calculates the tax and pays it from the sale proceeds at completion.
Keep your purchase deed and the invoices for any works you paid for, since the notaire uses them to calculate the gain. Your country of residence may also tax the gain, usually with credit for the French tax under the relevant treaty.
Fiscal representative
If you live outside the EU and EEA, including in the UK and the US, you need an accredited fiscal representative when the sale price is above €150,000 and you have held the property for less than 30 years. The representative checks the tax calculation and answers to the French tax authority for it. Residents of the EU and EEA do not need one.
French Tax Online acts as fiscal representative and handles the capital gains return for non-residents.
Bringing the proceeds home
The net proceeds arrive in euros, and the exchange rate can move several percent between signing the sale contract and completion. A forward contract fixes the rate for a transfer on completion day. Our currency partner, on the partners page, arranges it.
An English-speaking notaire on your side makes the sale easier to follow from abroad. French Notaires can match you with one. If you plan to buy again in France, start with the eligibility check.
Questions
Do I have to repay my French mortgage before selling?
No. The notaire repays the capital outstanding from the sale price at completion and arranges the release of the bank's charge.
Do non-residents pay capital gains tax on French property?
Yes, with social charges, reduced for each year you have held the property. The notaire pays it from the proceeds at completion.
When do I need a fiscal representative to sell?
If you live outside the EU and EEA, including the UK and US, and the price is above €150,000 for a property held less than 30 years.