Purchase of Real Estate in France by British Nationals Post-Brexit: New Rules

1. Context: Brexit and Access of British Nationals to the French Property Market

Since 1 February 2020, the United Kingdom has become a third country with respect to the European Union. This withdrawal has direct consequences for the acquisition of immovable property in France by British nationals. Prior to Brexit, British nationals benefited from the free movement of capital and could purchase property without restriction. Henceforth, they are subject to stricter rules, particularly with regard to prior authorisation for certain acquisitions (notably in sensitive areas) and taxation.

2. The Judgment of the Bordeaux Court of Appeal of 14 December 2022: A Welcome Clarification

In this case, a British national had signed a unilateral promise to sell for a property located in the Gironde department. The vendor withdrew, citing the absence of prior prefectural authorisation for the acquisition, in accordance with Article L. 412-1 of the French Code on the Entry and Residence of Foreign Nationals and the Right of Asylum (CESEDA). The Court of Appeal held that the promise to sell was void for failure to obtain this authorisation, thereby confirming the strict application of post-Brexit rules.

2.1. Facts and Procedure

On 15 March 2021, a British purchaser signed a unilateral promise to sell for a residential house. The vendor notified his withdrawal on 10 April 2021. The purchaser summoned the vendor for specific performance of the sale. The court of first instance dismissed the claim, considering the promise to be void because the purchaser had not applied for the prior authorisation provided for in Article L. 412-1 of the CESEDA. The Court of Appeal upheld this judgment.

2.2. Grounds for the Decision

The Court recalled that, since Brexit, British nationals are subject to the obligation to obtain prefectural authorisation to acquire immovable property in France, unless they can demonstrate lawful residence in a Member State of the EU (which was not the case here). The absence of this authorisation renders the promise to sell void by operation of law. The Court relied on Article L. 412-1 of the CESEDA, which provides that "the acquisition of immovable property by a national of a State not a member of the European Union is subject to prior authorisation". It also cited Article 1589 of the French Civil Code, which requires the promise to sell to be valid in order to produce legal effect.

3. The New Rules Applicable to British Nationals

Since 1 January 2021, British nationals must comply with several conditions to acquire immovable property in France:

• Prefectural Authorisation: for any purchase of immovable property, an application for authorisation must be filed with the prefecture of the department where the property is located. This authorisation is issued within a period of two months, subject to verification of the purchaser's situation (notably their right of residence).
• Compliance with Residence Rules: the purchaser must provide evidence of a valid residence permit or, failing that, a long-stay visa. The absence of a residence permit may lead to the refusal of authorisation.
• Specific Taxation: capital gains on immovable property realised by non-residents are subject to a levy of 19% (subject to exceptions), and transfer taxes may be higher. Furthermore, British nationals no longer benefit from the allowances for length of ownership applicable to EU residents.
• Protection of Sensitive Areas: in certain areas (notably border or military zones), the acquisition is subject to special authorisation from the Minister of Defence.

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4. Jurisprudential Analysis and Practical Implications

The Bordeaux judgment illustrates the strictness of French courts in applying these new rules. It is essential for any British purchaser to verify, before any signature, that they fulfil the legal conditions. The nullity of the promise to sell may result in the loss of sums paid (earnest money or deposit) and costs incurred.

Furthermore, prior case law (notably Civ. 3e, 15 June 2017, No. 16-16.847) had already emphasised the importance of prior authorisation for nationals of third countries. The Bordeaux judgment confirms this line of authority and explicitly extends it to British nationals post-Brexit.

5. How Maître Cécile Zakine Can Assist You

As a lawyer specialising in property and land law, I offer comprehensive support for British nationals and other foreign