Real estate glossary

A statutory document evaluating a property's energy consumption and greenhouse gas emissions. Rated from A to G, it is mandatory for sale or rental and directly impacts property value.

A French tax status allowing individuals to rent out furnished property while benefiting from major tax advantages, notably property depreciation to significantly reduce taxes on rental income.

The amount of money remaining in the investor's pocket each month after paying all expenses (mortgage, taxes, condo fees, maintenance). A positive cash flow means the property generates immediate profit.

The maximum legal interest rate that financial institutions can charge for a loan. It includes all credit fees (nominal rate, insurance, broker fees) and is set by the central bank to protect borrowers.

A legal and commercial terms meaning that the advertised property price already includes the notary fees and transfer taxes, meaning no standard additional closing costs for the buyer.

The most common loan type where each monthly payment covers both a portion of the principal balance and the interest. Over time, the principal portion increases while the interest portion decreases.

A specific legal structure in France allowing multiple individuals to co-own, manage, and transfer real estate assets easily, avoiding standard joint ownership complexities and optimizing inheritance.

The all-inclusive interest rate that reflects the true total cost of a mortgage. It incorporates the base borrowing rate, broker fees, mandatory insurance costs, and administrative fees.

A contract where a buyer purchases a property before or during its construction. Payments are unlocked in stages as construction milestones are met by the developer.

The regulatory body that sets binding rules for mortgage lending in France, including strict debt-to-income limits (35%) and maximum loan terms (25 years).

The professional counterpart to LMNP status, triggered if annual rental income exceeds €23,000 AND surpasses the household's other active incomes. Offers distinct advantages for long-term capital gains tax exemptions.

The French tax replacing the old ISF. It specifically targets net real estate assets (properties held directly or through corporate shares) when the total net taxable value exceeds €1.3 million.

A free, official public database provided by the French government, listing all actual real estate transactions recorded by notaries over the last 5 years, showing prices, dates, and sizes.

In real estate, VAT is mainly applicable to new property purchases (typically 20%). Specific investment strategies, such as managed serviced residences, allow investors to reclaim this tax in full.

A municipality's zoning and building regulations that define construction, height, architectural rules, and land use policies for every plot of land within the local jurisdiction.

A mortgage where monthly payments cover interest and insurance costs only. The original principal balance remains unchanged throughout the term and is repaid as a lump sum at the very end.

A financial metric representing the maximum total budget an investor can allocate toward a property's purchase price, closing costs, and renovations to meet their target yield.

Fees paid to the notary during a property transfer. Mostly consisting of government taxes (approx. 7-8% for older properties, and 2-3% for new builds).

Commonly known as 'paper stone' in France. An investment fund that pools capital to buy and manage large portfolios of commercial or residential properties, distributing regular rental dividends to shareholders.

A set of mandatory legal protections that safeguard the buyer against latent defects or structural flaws (such as the 10-year construction warranty in France).

Since 2021, French EPCs carry full legal weight. If a buyer or tenant discovers that the actual insulation or energy performance contradicts the certificate, they can pursue legal action for damages against the owner.

A French tax incentive program offering income tax reductions to investors purchasing brand-new residential properties to rent out, subject to capping rent amounts and commitment terms (6, 9, or 12 years).

An accounting mechanism in the French 'Régime Réel' that allows landlords to write off a property's building and furniture value over decades. This non-cash expense offsets rental income, often lowering the tax bill to zero.

The specific tax bracket applied to an individual's highest layer of income in France (0% to 45%). In standard unfurnished rentals, net profits are directly taxed at this rate plus 17.2% social contributions.