Property Tax in France: The Ultimate Guide for Non-Residents (2024)

FILE YOUR FRENCH TAX RETURN ONLINE

Taxe Foncière is a French land tax and the owner of the real estate pays it even if there is no house on the land.

Taxe d’Habitation is a residence tax, and it should be paid by those who are living in the property on 1 January, whether it is an owner or tenant. If it’s vacant, the owner is still obliged to pay it.

Both Taxe Foncière and Taxe d’Habitation apply to residents and French non-residents, and the demands for these taxes must be sent annually.

They should be paid on a particular date, usually, the deadline is 15 December (Taxe d’Habitation), and 15 October (taxe foncière). If you fail to pay on time, you will be hit with a 10% penalty.

What is Cotisation Foncière des Entreprises – (CFE) tax France?

Who is exempt from CFE tax in France?

Homeowners will not have to pay CFE tax in their first year of ownership or if their annual turnover is less than €5.000.

PTI Returns can help you claim a CFE refund if it is overpaid.

Can you reclaim VAT on the buy-to-let purchase?

Foreign and French buyers can reclaim the VAT (20%) on the price of new-build real estate by committing to renting it out as leaseback.

If the property is sold before 20 years of detention and not as leaseback, the VAT must be paid back to the French tax authorities, pro-rated of the years of detention.

If the owner decides to sell the property or take it out from the real estate market, then they must pay back a portion of the VAT (on a pro-rata basis).

• Non-residents should not file annual VAT returns. They can claim a VAT refund if the paid VAT in the tax year is more than 150€.
• Since there is no VAT collected on the rentals any amounts paid to French service providers can be claimed back.

PTI Returns is able to help with the submitting of the French business income tax return and VAT return.

How to avoid overpaying tax on rental income from your French property?

No one wants to pay more tax than they have to.

What are the changes for UK resident landlords of French properties after Brexit?

• contribution sociale généralisée (CSG): 9.2%
• contribution au remboursem*nt de la dette sociale (CRDS):0.5%
• prélèvement social (PSOL): 7.5%

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From January 1, 2021, UK citizens are paying all three of these social charges, instead of only PSOL. This is an increase from 7.5% to 17.2%.

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CRDS and CSG only refer to non-residents (EEA countries plus Switzerland) who are not covered by the social security system of another European country.

Furnished lettings must be properly registered with a unique business reference number known as SIRET because it is treated as a commercial activity.

Without needing to apply for a visa, UK residents will be able to visit for 90 days in every 180-day period in any EU country in the Schengen zone.

Stays for over 90 days will be allowed only if the citizen has a working or residence visa. This 90 days period includes time spent in all the EU countries, not just in one.

If a UK citizen sells a property after owning it for more than 30 years, the benefit of the sale is excluded from Capital Gains Tax and social charges due to the use of taper relief.

In other situations, Capital Gains Tax would be 19% plus 17.2% social charges on the taxable gain, resulting in a total tax charge of 36.2%.

The CSG, CRDS, and PSOL, as mentioned above, make up the social charges. For gains made before 2021, only the PSOL is payable by a UK citizen with a UK NIC record.

What are the US tax obligations for owners of French properties?

If you are an American citizen, you don’t need to report your investment in French property on your US tax return, unless the real estate is rented out.

If the property is not rented, you only need to keep the records of the purchase and any costs and expenses incurred as part of the purchase for when you decide to sell it.

A notary or a French tax specialist can assist you in interpreting any applicable exemptions, calculating the tax owed, and paying the tax.

Capital gains may also be expected to be reported on your French income tax return.

Generally, in France, non-primary residence capital gains are taxed. The capital gains tax rate is 19% for all, with an additional “prelevements sociaux” of 17.2% for French tax residents and 15.5% for non-residents.

The selling of a property owned for more than 22 years is excluded from the capital gains tax, and the sale of a property owned for more than 30 years is exempt from “prelevements sociaux.”

Americans should report the sale on Schedule D and Form 8949, claim foreign tax credits for French taxes on Form 1116, and either pay the difference in taxes or carry forward their excess foreign tax credits for up to ten years.

Reporting requirements for property tax in France for non-residents

Purchase: None; keep strict records.

During ownership: If the property is not let out, keep good records. If you rent it out you will need to file a French tax return and keep detailed receipts of every rental property’s income and expenditures.

A French tax advisor should be contacted for accurate information about your personal situation.

What are the income tax deadlines in France?

The deadlines for French income tax returns vary slightly every year and are announced in late spring. The deadlines for filing differ by département (101 regions in total).

Please, share your details with us until (we can file your tax return even after these dates but there may be penalties):

• 31/03/2023 for Leaseback and Furnished Lettings (Business tax returns)
• 15/04/2023 for Non-furnished and Micro income tax returns
  

Got questions about property tax in France? Request a free callback from a tax advisor.

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What happens if I have missed the deadline for my French tax return?

You can file your tax return later, but you will have to pay a fine.

Depending on how late you file, you can expect to pay the following:

• 10 % – if you make your declaration before receiving formal notice from the tax office
• 20 % – if you submit your declaration within 30 days of receiving the formal notice
• 40 % – if you fail to make a declaration within 30 days of receiving the formal notice
• 80 % – if the tax office discovers that you are performing undeclared work or engaging in illegal activity without receiving formal notice.

In addition to this, you may be required to pay late interest on your French tax bill.

Even if you are not required to pay income tax, you must still file a declaration in order to obtain a notice of non-taxation, which can be useful for certain administrative procedures.

However, you will not be penalized for making a late declaration.

Short summary of what is most important

Property tax in France for non-residents:

➥ You will be taxed on your property income as a non-resident in France if you live in the country for less than 6 months throughout the year.
➥ It is possible to be considered a tax resident in two countries.
➥ You need to have a look at the double taxation agreements between the two countries to determine where you should pay tax.
➥ France has signed tax treaties with more than 120 countries. So you can avoid double taxation and remain tax compliant both in France and in your home country.
➥ French property tax for UK residents, as no longer EU citizens, will be taxed on the profits from their property under the terms of the double taxation agreement between France and the UK.
➥ Your real estate could be liable to French local taxes, income, succession, capital gains, and wealth taxes, which you need to comply with.
➥ You can claim the VAT back on new built leaseback rental property that you invested in France.
➥ “Taxe foncière” and “taxe d’habitation” apply to residents and French non-residents.
➥ Do not forget you must file a French property tax return on income from your real estate each year.
➥ If you have missed the deadline for your French tax return, you will have to pay a fine.
➥ You can avoid missing the deadlines and paying penalties, by turning to reliable French property tax filing assistance. This decision can also help you minimize your taxes.

Who can help me file my French property tax return online?

If you are earning rental income as a non-resident and have property expenses to declare, if you want to minimize your tax burden, and improve profitability, you will benefit from enlisting the services of a French property tax advisor for non-residents. Our team can handle all the documentation and file your French property tax return online.

At Property Tax International (PTI Returns), our tax experts specialize in French property tax returns for foreign property investors.

• We will handle all your French tax return preparation, and follow any changes in French legislation at a fraction of the cost of the local accountant.
• Our property tax specialists will minimize your tax liability by applying every international tax agreement, tax relief, and allowable expenses you are entitled to.
• PTI Returns will keep you updated throughout the process and communicate directly with the French tax office on your behalf.
• PTI Returns has multilingual support via phone and email. Our tax experts can answer any of your international property tax-related questions.

The PTI Returns team will:

• help you avail of all international tax agreements and allowable expenses
• help you avoid overpaying tax
• keep you up to date with the latest changes in legislation
• deal with the language barriers with the local tax office
• make the preparation and filing process easy and fast
• help you file your tax return and pay taxes online

So you can sit back and drink your coffee while we take care of all the filing.

FILE YOUR FRENCH TAX RETURN ONLINE