Tax is an important consideration when budgeting for your purchase of property in France. Below is a brief description of the taxes that you will be liable for as a French property owner.
France has a large number of taxes levied on all aspects of life, including property. As a property owner, you will need to be aware of both national and lo local taxes.
Taxe Fonciere is a property tax that consists of taxes for the land and the building. The amount paid varies enormously according to location.
Taxe d’Habitation is similar to the UK’s Council Tax and is a residential tax payable in fall each year by the tenant on January 1st each year by the person living in your property. You will be liable for this tax in addition to the Taxe Fonciere if you live in your property as a principal residence.
Taxe Professionelle is charged if you use your home also as your place of work.
Impot sur le plus-values (Capital Gains Tax) is not payable on property sale if it has been your principal residence. However if the property is not your principal residence, tax will be levied at 16% unless you have owned the property for more than 15 years for the first 5 years of ownership and the nit decreases by 10% per year to reach 0 after 15 years of ownership.
Droits de succession Inheritance tax has tremendously changed recently in France and assets transferted between parents and / or spouse are free of tax
Taxe a la Valeur Ajoutee (VAT) is charged at a higher rate and on more items than in the UK. Currently TVA stands at a rate of 19.6%.
Stamp Duty for the transfer of ownership of a property has to be paid by the buyer. The overall extracost of purchase can be estimated slightly Under 5% for off-plan properties and slightly Under 9.5% in case of resale.
IMPOT SUR LE REVENU (Income Tax) is payable by all residents in France and all non residents making profits in France. It is based upon your annual income received. For rental income from your property, the tax is estimated at 25% of the net income (after several déductions land tax, interests repayments of a French mortgage, charges,…)
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