Your most frequent questions on the mechanism, guarantees, taxation and process of a French installment sale.
In installment sale, payments run over a fixed duration set at signing (typically 10 to 20 years). In viager, the annuity is paid for life. If the seller dies in installment sale, remaining instalments go to the heirs; in viager, the annuity ends.
Remaining instalments are due and paid to the seller's succession until the end of the term set in the notarial deed. Patrimonial transmission is secured — a major advantage over the viager.
The notarial deed includes a resolutive clause. In case of payment default after formal notice, the sale is dissolved by right. The seller recovers full ownership and keeps the sums already received as damages.
Free: seller leaves at signing, buyer takes possession immediately.
Occupied: seller keeps a right of use during all or part of the instalment period, lowering the price.
Choice depends on your life plans and patrimonial situation.
Instalments are treated as deferred payment of the sale price, not as an annuity. On the seller's side: standard French capital gains regime — total exemption on principal residence, allowances for length of holding on secondary residences. The 70% allowance reserved for life annuities (article 158-6 of the French Tax Code) does not apply.
No. The installment sale is precisely a direct payment to the seller, with no bank loan. No interest is paid since it is not a loan. No borrower insurance is required. The transaction is handled entirely before a French notary.
Yes, in most cases. The notarial deed provides for an indexation clause, generally based on the French IRL rent reference index.
Yes, but the instalments owed to the initial seller must continue to be paid (the property is encumbered by the vendor's privilege). In practice, resale is rare before the end of the contract.
Standard French notary fees (approximately 7 to 8% of the price for an existing property), agency fees (usually paid by the buyer, around 5 to 7.5% incl. VAT depending on the mandate), and registration fees for the vendor's privilege.
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