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When Selling or
Disposing of a Property
When Renting out your
Property
General Tax
There are different taxes when buying and renting
property in France so I have listed the main ones
When owning a property.
-
Taxe fonciere
(property tax) is similar to rates and is paid
whether you live in the property or not and is paid
by the owner. It is split between tax for the
building and tax for the land and varies greatly
depending on the location. New property is exempt
from property tax for the first two years.
-
Taxe d'habitation
(residential tax) is a tax payable by the person
living in a property on January 1st of each year
whether they are the owner or tenant. Therefore if
you own and live in a property you pay both
fonciere
and
d'habitation
tax.
-
Taxe
assimilee
(sundry tax) is a tax only paid in certain areas,
particularly popular holiday resorts as the local
authorities must spend more on amenities and upkeep.
-
Taxe professionelle
(professional tax) is paid if you want to use your
property to work from home.
-
Import sur la fortune
(wealth tax) does not apply to most first time
buyers in France as a couple's annual income has to
exceed €720,000.
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When selling or
disposing of a property
Import sur les plus-values
(capital gains tax) is payable on the profit
you make when you sell your property in France. So
long as the value is more than €15,000 (i.e. not a
caravan), you must pay capital gains of 16.5%. Once
you have owned the property for 5 years, it starts
reducing at 10% of the 16.5% every year,
so that after 15 years in total your capital gains
liability is zero.
Droits de succession
(inheritance tax) is payable on the estate of
a deceased person. In France the surviving spouse
has an allowance of €76,000 and surviving children
€46,000 and after that it is a sliding scale.
Inheritance tax calculations are extremely
complicated and should be discussed with a lawyer
who knows French law, however two pieces of advice
before you complete on your French property are,
firstly decide how you want to dispose of your
property in the event of one death and secondly make
out a will in France.
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When
renting out your property
Revenue fonciere
(rental income tax) is payable by everybody,
resident or non resident on rental income received
from a French property.
If the amount of rent you receive in a year is less
than €76,300 you qualify for a 72% tax deduction and
the balance is taxed at the standard rate of 25%.
You must also declare your rental income on your UK
tax return but you will not pay twice under the Dual
Tax Treaties in Europe.
There may be a small bill or refund depending on the
difference between what you paid in France and what
you would have paid in the UK, so it is worth
consulting the Inland Revenue before completion of
your property.
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General tax
TVA ( VAT) is payable on most things in France and
the current rate is
19.6%
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