Taxation of French Properties

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Because we have an international tax and financial advisor inhouse. That makes us different!
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In the following you will get information regarding:

Running taxes on French real estate

If you own a French real estate there are 2 different taxes ”Taxe foncière” (estate tax) and ”Taxe d´habitation” (living tax).
They are calculated on the basis of a theoretical rent value multiplied by a factor determined by the individual municipalities.

Tax on capital gains of the sale of a French real estate

If the property is your primary residence, capital gains are not subject to taxation.

Is the property your secondary residence, the capital gains are subject to tax in France.

When you calculate the capital gain, you add to the purchase price the cost to the notary etc and eventual cost for renovations. But it is a must that renovations are made by professionals and you have the invoices. Instead of the actual costs for renovations you can add 15 % to the purchase price.

In the sales price you can deduct costs for the real estate agent etc.

The tax is 19.0% if you live in the EU (otherwise it is 33.3%). For particularly high profits, additional taxes may be added, as mentioned below.

The first 5 years you have to pay tax on 100% of the capital gain.

Reduction in progress from 6th to 21st year is achieved by 6% p.a. and in year no. 22 with 4%, which means that the tax on the profit is zero after 22 years.

In addition social contributions. The percentage depends on where you live. If you live in France you have to pay 17.2%. If you live outside France but still in the EU or Swiss the social contribution is only 7,5%.

The first 5 years you have to pay social contributions on 100% of the capital gain. However, from year no. 6 to year no. 21, a reduction of 1.65% will be obtained, in the year 22 1.60% and for the last year 9.00%, so that after 30 years of ownership no social contributions will be paid.

For owners of French secondary housing living in France,
French tax and social contributions of property gains on sale can thus be set as follows:

Numbers of year as owner
Taxation basis
Social contribution basis
Real tax in percentage
1
100%
100%
36,20%
2
100%
100%
36,20%
3
100%
100%
36,20%
4
100%
100%
36,20%
5
100%
100%
36,20%
6
94%
98,35%
34,78%
7
88%
96,70%
33,35%
8
82%
95,05%
31,93%
9
76%
93,40%
30,50%
10
70%
91,75%
29,08%
11
70%
91,75%
29,08%
12
70%
91,75%
29,08%
13
70%
91,75%
29,08%
14
70%
91,75%
29,08%
15
70%
91,75%
29,08%
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For particularly high profits, additional taxes may be added as following:

Capital gains
Extra tax
EUR 50.000 – 100.000
2,0 %
EUR 100.001 – 150.000
3,0 %
EUR 150.001 – 200.000
4,0 %
EUR 200.001 – 250.000
5,0 %
Above
6,0 %

Be aware that the above scheme is for owners who live in France.
As mentioned, taxes on capital gains are different if you live outside France but still in the EU/Swiss and then again different if you live outside EU.

You can read the schemes and more or less everything regarding to real estate etc in our e-book at 52 pages for free!

Skovby Luxury

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"The ultimate guide to purchasing and selling real estate, tax- and wealth matters in France".

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Important

If you live outside France capital gains on your French real estate can be subject to tax in your home country too, depending of the double treaty between France and your home country, if any. There can also be running taxes in your home country.

If you live in France and you sell real estate in other countries, the capital gains can be taxed in France. Maybe it can also be taxed in the country where the estate is, depending of the double treaty between France and the other country, if any.

If you are going to move to France and you want to sell the estate outside France, you could consider to sell it before moving.

Tax on rental income

If you rent out your French real estate for example on a weekly basis a part of the income is not subject to tax in France as personal income.
If you live outside France, it also can be subject to tax in your home country, depending of the double treaty between France and the other country, if any.

You can read the rules and more or less everything regarding to real estate etc in our e-book at 52 pages for free!

E-book for Free

We have made an e-book
"The ultimate guide to purchasing and selling real estate, tax- and wealth matters in France".

You can have it for free.

Give us a call at +33 64 06 16 500 or +33 64 39 14 317

French wealth tax

The French wealth tax (IFS) from 2018 in France has been abolished, except for real estate (IFI) and special luxury goods such as yachts and private jets.

  • If you have a fortune in a property of less than 1.300.000 EUR, you do not have to pay wealth taxes in France.
  • If you live in your primary residence in France, you will receive a 30% reduction in the wealth tax on the value of the property.
  • If you live outside of France, it is only the equity of the French property, which is due to be taxed and can be reduced by a mortgage, when you buy the property.

The following progressive wealth tax rate applies:

Value of the property
Wealth tax
EUR 0 – 800.000
0 %
EUR 800.001 – 1.300.000
0,50 %
EUR 1.300.001 – 2.570.000
0,70 %
EUR 2.570.001 – 5.000.000
1,00 %
EUR 5.000.001 – 10.000.000
1,25 %
Above
1,50 %

It should be noted that the above is not per. person but per. household. This also applies to cohabitants.
It is the owners duty to specify the real value of his/her property.

You can read the schemes and more or less everything regarding to taxes and real estate etc in our e-book at 52 pages for free!

Skovby Luxury

E-book for Free

We have made an e-book
"The ultimate guide to purchasing and selling real estate, tax- and wealth matters in France".

You can have it for free.

Give us a call at +33 64 06 16 500 or +33 64 39 14 317

French inheritance tax

Pay attention to the special rules in France, for example, that your spouse's wife is not a forced heir.

The inheritance tax is payable on death after a progression scale, which depends on the relationship with the deceased.

Between children and parents there is a basic deduction of 100,000 EUR per heir. If you live outside France, it is only the equity of the French property that is subject to inheritance tax.

The inheritance tax between parents and children is as follows:

Value of the property
Wealth tax
EUR 0 – 8.072
5,0 %
EUR 8.073 – 12.109
10,0 %
EUR 12.110 – 15.932
15,0 %
EUR 15.933 – 552.324
20,0 %
EUR 552.325 – 902.838
30,0 %
EUR 902.839 – 1.805.677
40,0 %
Above
45,0 %

Between parents and step children, the tax is up to 60%. Between siblings it is up to 55%.

If you live outside France, it is only the equity of the French property, which is subject to inheritance tax.
It can be avoided / reduced by a mortgage in the property.

We recommend that you make a concrete calculation.

You can read the schemes, rules and more or less everything regarding to taxes, inheritance and real estate etc in our e-book at 52 pages for free!

E-book for Free

We have made an e-book
"The ultimate guide to purchasing and selling real estate, tax- and wealth matters in France".

You can have it for free.

Give us a call at +33 64 06 16 500 or +33 64 39 14 317

Personal income tax

Single person without children

In France personal income for a single without children is taxed
as the following progressive scale in 2021:

Personal income
Tax
EUR 0 – 9.964
0 %
EUR 9.965 – 25.405
11,0 %
EUR 25.406 – 72.643
30,0 %
EUR 72.643 – 156.244
41,0 %
Above
45,0 %

In addition, 17.2% in social contributions.

For particularly high profits, additional taxes may be added as following:

Personal income
Tax
EUR 0 – 250.000
0 %
EUR 250.001 – 500.000
3,0 %
Above
4,0 %

If there are children, the tax is reduced.

Couple without children

In France personal income for a couple without children is taxed
as the following progressive scale in 2021:

Personal income
Tax
EUR 0 – 19.928
0 %
EUR 19.929 – 50.810
11,0 %
EUR 50.811 – 145.286
30,0 %
EUR 145.287 – 312.488
41,0 %
Above
45,0 %

In addition, 17.2% in social contributions.

For particularly high profits, additional taxes may be added as following:

Personal income
Tax
EUR 0 – 500.000
0 %
EUR 500.001 – 1.000.000
3,0 %
Above
4,0 %

If there are children, the tax is reduced.

Tax on capital gains (shares, bonds, interests, dividends etc.)

Capital gains, dividends etc. are not taxed as personal income, but they are taxed by a flat tax of 12,8 % + social contributions at 17,2 % = totally 30,0 %.

For particularly high profits, additional taxes may be added as following:

  • 3 % for amount between 250.000 and 500.000 EUR for a single person and between 500.000 and 1.000.000 EUR for a couple.
  • For amount above 500.000/1.000.000 EUR the extra tax is 4 %.
  • Individuals with a low income can choose to be taxed as personal income. Then 40 % of dividends are tax free. The tax for capital gains is reduced with 50 % after 2 years owner ship and with 65 % after 8 years owner ship. But 100 % of the gains /dividends are subject to 17,2 % social contributions.

You can read the schemes and more or less everything regarding to taxes and real estate etc in our e-book at 52 pages for free!

E-book for Free

We have made an e-book
"The ultimate guide to purchasing and selling real estate, tax- and wealth matters in France".

You can have it for free.

Give us a call at +33 64 06 16 500 or +33 64 39 14 317