Buying together in France: indivision, Pacs, marriage

Unmarried couples: indivision and shares

Without marriage or a Pacs, buying together creates an indivision. The decisive point is the written split in the deed of sale: it determines what each person gets back on resale or separation. An indivision is never a permanent trap: partition “can always be requested, unless it has been deferred by judgment or agreement” (art. 815). The rules for joint management (2/3 majority, right of first refusal on the other’s share) are set out in our guide to indivision.

The specific risk for unmarried couples is death. Service-public.gouv.fr is explicit: a Pacs partner and an unmarried partner have no rights in the deceased’s estate in the absence of a will. And even with a will, a bequest between unrelated persons is taxed at 60% (CGI, art. 777, table III), whereas a spouse and a Pacs partner are exempt from inheritance tax (CGI, art. 796-0 bis).

Pacs partners: separate property by default, indivision by option

Since 1 January 2007, the default regime for a Pacs is separation of property (séparation des patrimoines): each partner retains “the administration, enjoyment and free disposal of their personal property” (Code civil, art. 515-5). For a home bought together, service-public.gouv.fr specifies that each person’s share depends on the deed of purchase; if nothing is stated, you each own half. If you financed more than half, you can apply to the tribunal judiciaire (civil court) for compensation; a lawyer is compulsory for claims above €10,000.

Partners may also opt, in the Pacs agreement or an amending agreement, for the indivision regime. Property acquired afterwards, together or separately, is then “deemed to be held in undivided half shares, with no recourse by one partner against the other on account of unequal contribution” (art. 515-5-1). In other words, whoever paid more gives up the right to recover it. Service-public.gouv.fr also places under indivision any Pacs concluded before 1 January 2007 and never amended since.

Spouses: everything depends on the matrimonial regime

Without a marriage contract, spouses are subject to the community of property, which “is established in the absence of a contract” (art. 1400). It includes the acquêts (property acquired during the marriage) made together or separately, financed by their income (art. 1401). All property is presumed to be jointly owned, unless it is proven to belong to one spouse alone (art. 1402): a property inherited or bought with personal funds must be documented, in practice by a declaration in the deed.

Under separation of property (séparation de biens), each spouse retains free disposal of their personal property (art. 1536). A property bought together is held in indivision according to the agreed shares; a property that neither spouse can prove they own exclusively is deemed held in indivision in equal halves (art. 1538).

The tontine or accrual clause

The tontine (or clause d’accroissement, accrual clause) is a clause in the deed of purchase under which the share of the first to die passes to the survivor, “so that the last survivor shall be deemed the sole owner of all the property” (CGI, art. 754 A). It therefore protects the survivor without a will, which is of interest mainly to unmarried couples.

The tax authority is not fooled: this property is “deemed transferred free of charge” to the beneficiary, and so taxed as an inheritance. Exception: a main residence shared by two buyers whose total value is less than €76,000 escapes this rule, unless the beneficiary opts for inheritance tax (art. 754 A). Above this threshold, a surviving unmarried partner falls under the scale for unrelated persons in article 777. The civil effects of the clause (inability to sell one’s share alone or to request partition) should be discussed with the notaire before signing.

Which professional to consult

The notaire draws up the deed of purchase: they record the shares, any tontine clause and, for spouses, the personal origin of the funds. The courtier en crédit (mortgage broker) arranges the joint financing and the split of borrower insurance. The agent immobilier (estate agent) values the property, a useful figure for checking the €76,000 tontine threshold or costing an exit from indivision.