FRANCE Law and Practice Contributed by: Antoine Mercier, Myriam Mejdoubi and Gabriel Dalarun, DLA Piper France LLP
2.7 Soil Pollution or Environmental Contamination In accordance with the “polluter pays” princi - ple, a landowner cannot be held responsible for historic contamination of the soil/groundwater. However, if it is established that the landowner has been negligent or has not been a “know - ing permitter” in the polluting process, then it is assumed that the landowner could incur liability, although the concept of a “knowing permitter” has not been defined in legislation. When investing in a site that has pollution prob - lems, it is assumed that an investor can take over the obligation to restore the site after it has been polluted, and therefore becomes liable if the site is not properly restored. However, the initial polluter will be liable again if the investor becomes insolvent. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law The zoning and planning laws and regulations for each local region are available to the public and must be checked before applying for a building permit. Copies of the regulations and local deci - sions can be obtained for a nominal cost. 2.9 Condemnation, Expropriation or Compulsory Purchase Expropriation processes are used to facilitate major public or semi-public development pro - jects. They assess what is in the public interest and the amount that should be paid for expropri - ated properties. 2.10 Taxes Applicable to a Transaction Transfer taxes usually apply at the rate of 5.09% to 5.8% on the purchase and sale of a real estate asset that is not “new” (ie, that has been built for more than five years), subject to various condi - tions:
• transactions involving “new” buildings, or transactions whereby the buyer commits to re-selling the property within a five-year period, are subject to a 0.715% transfer tax; • if the buyer commits to erect a building within a four-year period and complies with this undertaking, a fixed registration duty of EUR125 applies; • a specific 0.1% contribution applies to the sale of property/asset deal ( contribution de sécurité immobilière ); • for the disposal of office premises, retail premises and storage premises in Île-de- France, the Paris region, an additional tax of 0.6% of the sale price applies if the disposal is not subject to VAT. Indirect transfers of real estate through the trans - fer of a company holding real estate assets are subject to transfer tax at the rate of 5% of the price paid for the shares. Transfer tax applies to all companies, irrespective of their legal form, where the market value of the real estate accounts for more than 50% of the total value of the company’s assets. Transfer taxes are typically paid by the buyer, although the buyer and seller remain jointly liable for their payment to the French Treasury. 2.11 Legal Restrictions on Foreign Investors There are no restrictions on foreigners investing in property located in France, except for agri - cultural properties that must be authorised by the local prefect, and sensitive activities that must be authorised by the Ministry of Econom - ics. Since 12 May 2017, the sale or purchase of property located in France by non-residents, for an amount exceeding EUR15 million, must be reported to the Banque de France , for statistics purposes only.
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