Buying a property jointly without being married raises an essential question in France: what happens if one of the buyers dies before the other? The tontine clause, also known as a tontine agreement, addresses this issue precisely by allowing the survivor to automatically become the sole owner of the property. This legal mechanism, often used by unmarried or civil-partnership (PACS) couples, deserves to be fully understood before being included in a purchase deed.
In summary
- The tontine clause, inserted into the purchase deed, provides that upon the death of one of the buyers, their share automatically passes to the surviving buyer(s), outside of the estate.
- It particularly protects the surviving partner, who has no legal rights over their partner's estate in the absence of marriage, a civil partnership (PACS), or a will.
- Its validity requires a genuine element of chance: at the time of purchase, the buyers must have comparable chances of surviving one another.
- The applicable taxation depends on the couple's status and the value of the property, with a specific allowance for the main residence below a certain threshold.
Definition and how the tontine clause works
What is a tontine agreement?
The tontine clause is a clause inserted into the purchase deed of a property acquired jointly by at least two people. It legally organises the fate of the ownership upon the death of one of the buyers, replacing the traditional rules of joint ownership and inheritance with an automatic accrual mechanism. This arrangement is particularly popular with unmarried or civil-partnership (PACS) couples who wish to secure the family home without going through marriage.
How does it work in practice?
Upon the death of one of the buyers, their share of the property does not fall into their estate: it passes directly to the surviving co-buyer(s), who is then legally deemed to have been the sole owner of the property since the original purchase. This so-called accrual mechanism therefore completely removes the tontined property from the deceased's estate, meaning that the deceased's heirs cannot, in principle, claim any rights over the property. This point is essential for unmarried couples, because in the absence of a tontine, the deceased's share would pass to their legal heirs (children, parents, siblings), rather than to their partner.
Conditions for the validity of the tontine clause
The requirement of a genuine element of chance
To be valid, the tontine clause must be based on a genuine element of chance: at the time the deed is signed, none of the buyers must have any certainty or high probability of dying before the other. In practice, both buyers must have statistically comparable chances of surviving one another, which generally implies a similar age and state of health. If one of the buyers is seriously ill at the time of purchase, the clause may be reclassified and annulled by the courts, for lack of an element of chance.
The required formalities
The tontine clause must imperatively be drafted by a notary and inserted into the authentic purchase deed, at the time of acquisition. It cannot be added afterwards, once the contract has been signed. This is why this choice must be anticipated from the outset of the purchase project, in consultation with the professional drafting the deed. Even before considering this legal arrangement, it is useful to know the actual value of the property in question thanks to a free property valuation, particularly to anticipate the tax implications related to the main residence threshold.
The advantages of the tontine clause
Protecting the surviving partner
The main advantage of the tontine lies in the protection it offers to the surviving partner. In the absence of marriage or a civil partnership (PACS), a partner has no legal inheritance rights: without a will, they receive nothing from their partner's estate, even after several years of living together. The tontine clause makes it possible to work around this lack of legal protection by guaranteeing that the shared home will automatically pass to the survivor, without depending on a will that could be contested or revoked.
Avoiding inheritance-related joint ownership
Without a tontine clause, the death of a co-purchaser places the survivor in joint ownership with the deceased's heirs (children, parents, etc.). This situation can prove complex and conflictual, particularly if the heirs wish to sell the property or receive its value, which may force the survivor to leave the home. The tontine avoids this forced joint ownership since the property is entirely excluded from the deceased's estate and reverts in full ownership to the survivor.
The taxation of the tontine clause
The principle: taxation as an inheritance
From a tax standpoint, the share transferred through the tontine mechanism is treated, pursuant to Article 754 A of the French General Tax Code (Code général des impôts), as a gratuitous transfer and is subject to inheritance duties. The applicable rate depends on the relationship between the co-purchasers: unmarried partners not bound by a PACS (civil partnership) are considered third parties, benefiting from a very low allowance (around €1,594) and a tax rate that can reach 60% of the transferred value. Partners bound by a PACS, on the other hand, benefit, like married spouses, from a total exemption from inheritance duties, which makes the tontine tax-neutral for them.
The exception for the main residence
A notable exception concerns the co-purchasers' shared main residence: when its total value is less than €76,000, the transfer through tontine escapes inheritance duties and is taxed under the more favourable regime of transfer duties on sales for consideration (droits de mutation à titre onéreux). This threshold, unchanged for several years, applies only to a property held directly, and not to shares in an SCI (real estate holding company) that would hold the same home. Above this threshold, inheritance duties apply to the entire transferred value, which can represent a significant tax cost for an unmarried couple not bound by a PACS. A notaire remains the only party qualified to precisely assess the tax impact specific to each situation.
Drawbacks and precautions to be aware of
A clause that is, in principle, irrevocable
The tontine clause can only be modified or removed with the unanimous agreement of all co-purchasers, which makes it particularly rigid in the event of disagreement or separation. Unlike a will, it cannot be unilaterally revoked by one of the purchasers.
The risk in the event of separation
For an unmarried couple who separate, the presence of a tontine clause can seriously complicate the division of the property, since removing it requires the agreement of both parties and, often, a further visit to a notaire. If disagreement persists, only a court decision can allow the situation to be resolved, which can lead to significant delays and costs.
Reduced protection for forced heirs
When one of the purchasers has children from another relationship, the tontine may come into tension with the forced heirship rights (réserve héréditaire) of those children, who could challenge the arrangement if they believe their rights have been harmed. This risk should be anticipated in advance with a notaire, who can propose arrangements tailored to each family's situation.
Alternatives to the tontine clause
Life insurance
Taking out a life insurance policy for the benefit of one's partner makes it possible to transfer a capital sum to them in the event of death, often with favourable taxation, without the constraints of irrevocability inherent to the tontine. This solution is, however, distinct, since it transfers a capital sum and not directly ownership of the home.
Cross ownership splitting (démembrement croisé de propriété)
This arrangement consists, for each purchaser, in holding bare ownership of half of the property and usufruct of the other half, in a crossed manner. Upon the death of one of them, the survivor recovers full usufruct of the property, guaranteeing them a lifetime right of use, with taxation potentially more favourable than the tontine depending on the situation.
The SCI with an allocation clause
Setting up a société civile immobilière (real estate holding company) together with an allocation clause or a preference clause also makes it possible to organise the transfer of shares to the survivor, with greater management flexibility than classic joint ownership or a direct tontine. This arrangement, however, requires more formalities and higher setup costs.
Conclusion
The tontine clause remains a valuable tool for protecting a cohabiting partner or civil partnership (PACS) partner against the limits of statutory inheritance, provided its conditions of validity are strictly observed and its consequences in the event of separation are fully understood. The choice between tontine, cross usufruct arrangement (démembrement croisé), life insurance or a property holding company (SCI) depends above all on each couple's personal, financial and family situation, and is best examined with a notaire before any signature. To be supported in your joint property purchase project, a local Capifrance property consultant can help you structure your search and identify the property best suited to your situation, before the notaire legally secures the acquisition.
FAQ
Is the tontine clause reserved for unmarried couples?
No, it can in theory be used by anyone buying a property jointly, including friends or members of the same family. However, it is particularly recommended for unmarried or PACS-registered couples, since married spouses already benefit from enhanced statutory inheritance protection.
Can a tontine clause be removed after purchase?
Yes, but only with the agreement of all co-purchasers and generally through a new notarial deed. In the absence of mutual consent, only legal action can bring it to an end, particularly in the event of a conflictual separation.
What happens if one of the purchasers was seriously ill at the time of purchase?
In that case, the requirement of a genuine element of chance (aléa) is not met, and the tontine clause can be annulled by a court if it is challenged by the heirs. This is why it is essential to honestly assess the state of health of both parties before including this clause in the purchase deed.
Is the tontine more advantageous than the PACS for protecting one's partner?
The PACS already offers a total exemption from inheritance tax, which makes the tontine tax-neutral for PACS partners while still securing the transfer of the property. For unmarried cohabiting partners, the tontine remains useful for transferring the home, but it does not exempt them from the inheritance tax applicable to third parties beyond the threshold for the main residence.
Should you consult a notaire before choosing a tontine clause?
Yes, this choice has lasting consequences for the couple and must be examined with a notaire, the only professional authorised to draft this clause and assess its legal and tax implications specific to each situation. They can also compare the tontine with other solutions such as cross usufruct arrangement (démembrement croisé) or the property holding company (SCI), before you finalise your choice among our property listings.
Author
Frédéric Rémy – Director of Sales Performance
A real estate professional with several years of experience within the Capifrance network, I would like to share essential advice with you to help you successfully complete your property project with our advisors.
