Notarial Guide for Real Estate in France: Buy, Hold, Transfer and Special Features for Swiss and Cross-Border Commuters

Under what circumstances may a Swiss person be interested in consulting a French notary?

The French legal and tax rules are likely to be of interest to a growing number of Swiss citizens. Indeed, cross-border relations have grown exponentially:

For example, what happens in the event of a marriage between a Frenchman and a Swiss woman (or vice versa)? Does French law or Swiss law apply to their matrimonial regime?

In terms of real estate, almost 200,000 Swiss people reportedly own real estate in France and more than 100,000 French people live in Switzerland. What taxes may apply if the property is sold or if it is passed on to children?

Border notaries are consulted on a daily basis regarding these cross-border issues.

What are the most frequently asked questions?

The main concern for a Swiss resident with assets in France is often inheritance taxation. Indeed, inheritance taxation is very low in Switzerland, while it can reach high tax rates in France, where the highest marginal rate is 45% for the benefit of children (for a transfer in excess of € 1,805,677).

Following the termination of the Franco-Swiss inheritance tax treaty, France may tax assets in Switzerland if the parent or child is domiciled in France.

This issue seems very worrisome from the Swiss perspective.

In this case, what legal solutions can be found?

First of all, it is necessary to carefully analyse the situation to determine which properties are likely to be taxed in France.

Secondly, there exist legal mechanisms for transferring property with a reduced tax burden. For example, gifts are often made during the parents’ lifetime with a usufructuary reservation for their benefit.

What about the real estate civil company known as an SCI (société civile immobilière)?

The SCI was very useful under the old French-Swiss tax treaty. Since the termination of this treaty, the SCI's attractiveness has diminished significantly, but it still retains some advantages: for example, for the purpose of arranging an inheritance amongst several heirs.