KevinK

Thanks for your input dragonrouge. He has been speaking to developer and they are aware that he is trying to resell it. I think they are only giving him to the end of Dec though to sell on. Hopefully if he does sell combined with  the 40,000 euro already paid it will cover any shortfall, interest etc. I will keep you posted how this develops as it will serve as a warning to other prospective purchasers to make sure you have finance in place or have the right to cancel in the contract before you sign. Similar problems have arisen in the UK where unconditional contracts were signed 2 yrs ago for apartments booked at the peak of the bubble. They are now ready to complete but valuations have fallen by at least 30% and there are only 75% loan to value mortgages available. This leaves a great big hole for those originally looking to buy with a 90% mortgage of the contract price. Lots of money to try and find and lots of writs to be issued if you do not find it.!!

Agree. He has been in contact with developer Kaufman and Broad. He signed a contract to buy at 274,000 euro and has been told a reasonable sales price now is 250,000 euro. If it does sell at that then his initial deposit of 40,000 euro will hopefully cover the shortfall and costs / penalties etc. Even at that a 40,000 euro loss is hard to swallow. If he had not waived his right to cancel in the event of not securing a french mortgage he could cancel and claim his deposit back. He actually would have made money on the exchange rate fluctuation..!

Thanks for the info. I will let him know as he does not appear too concerned. He thinks that the problem will rest in France and that they will not pursue in the UK. Although he made a very silly mistake in waiving his right to cancel in the event of not securing mortgage finance. I think legally he now owns the property even though he has only paid 15% of the price.

He has communicated with the builder and notaire put him in touch with an agent who is attemping to sell on at a reduced price of 250,000 euro. I think the builder has given to the 31 Dec or else he takes action. Not sure if that is in french courts or UK courts. That is where he is concerned in that if a judgement goes against him in the french courts do they then pursue this through the UK courts. Also how quickly is this likely to happen. I think the chances of selling at such short notice is not good.

Hi. I posted my first thread yesterday and found the feedback very helpful. I am writing this on behalf of a business partner who booked an off plan property about 18 months ago that is due for completion now. The problem is that he cannot get a mortgage due to the stark changes in the mortgage market in the UK. Also when he booked the property (for some strange reason) he informed the notaire that he would not need a french mortgage which apparently waived his right to cancel the contract on that basis. He was meant to be paying stage payments throughout 2009 which he has not been doing (no money). Hence the builder has been adding on interest charges and now want the full money as property is finished. They even asked him to pick tiles for apartment..! My question is what can he do given that he cannot complete and how far can they push him legally given that he lives in UK..? He payed a 15% deposit at booking stage which was approx 40,000 euro. Purchase price of property is 274,000 euro.

Thanks again for the replies. You are all very helpful. So the message seems to be don't get too hung up on the VAT. My fear was that if 5 yrs go by no VAT is payable by any prospective purchaser and the value of the property would go down. I suppose I really need to read round a few more threads that deal with same query. I am going to post a new thread thta concerns a business partner of mine so as not to clutter this one and would be grateful for any feedback.

Thanks for all the replies folks. I did not buy under the guaranteed rental schemes. I booked it off plan in 2006 and paid stage payments until completion in 2007. I then gave to an agent who has it rented out for me. An interesting point was raised that it may be difficult to sell with a sitting tenant. The only furniture I put in the property was a kitchen. Can it be sold to a new purchaser who is buying for investment and is happy to have an existing tenant paying rent. That is another question on top of the VAT question though. So it was bought for 204,000 which included say 33,400 euro approx. If I sell for 250,000 euro the VAT the new purchaser pays is approx 41,000 euro. Am I correct in stating that I then pay the difference 41,000 minus 33,400 to the VAT man. Or if I decide to keep property is it a good idea to try and reclaim the 33,400 VAT that I have paid..???

Hi, I purchased a new build property 3 yrs ago (actually completed in May 2007) and the price including the 19.6% VAT was 204,000 Euro. If I sell now does the new purchaser also pay VAT. I am confused as to whether to sell now or to hold for more than 5 yrs. If I hold is VAT that I have paid "lost" or should I try and claim it back now (approx 30,000 euro). I am resident in Britain and the property is rented out. Would appreciate your advice, Thanks, Kevin.    

Just joined site and was looking through existing threads to try and find answer to my query. I am thinking of selling an apartment which I bought as a new build 3 yrs ago for 204,000 euro inclusive of VAT at 19.6%. If I sell now is VAT included in the price to the new prospective purchaser or do they pay any VAT at all.? For eg if I sold at 225,000 euro am I then liable to pay VAT AT 19.6% on the 21,000 euro. I am weighing up whether I should sell after Christmas or look at maybe reclaiming the VAT back on the original purchase and hang on to property for a while. I am concerned in case the VAT I have paid is "lost" if I hold on to property for more than 5 yrs. Would appreciate your advice. Thanks Kevin.