Owning property in France

Property owners are liable to French income tax on French rental earnings, regardless of whether they are resident in France, and will need to submit a tax return to the French authorities of rental income in France, along with any other French-sourced income.

UK residents must also include details of rental income and expenses on their UK tax return, whether or not they made a profit.  This applies regardless of whether or not the rents are brought into the UK.  Interest arising on French bank accounts to handle the rental receipts and payments is also taxable here.   Any French tax paid will be allowed as a credit against their UK tax bills.

Now there is an additional tax burden since the French wealth tax (or Impôt de Solidarité Sur la Fortune) applies to both residents and non-residents in France. For residents, it is levied on worldwide assets. For non-resident owners of French property, it applies to French assets only.

The tax is paid by around five per cent of the French population and is levied at very low rates. No tax is payable on assets of up to €790,000 and the top rate, which applies to assets over €16,480,000, is 1.8 per cent.

It is also imposed on a sliced basis, so that someone owning net assts valued at €1,000,000 would only pay tax on €210,000 (at 0.55 per cent) as the first €790,000 is tax-free.

The French taxation system is complex and seeking professional advice on the tax implications if you are considering settling in France is essential. For further information, please contact us.

If you wish to know more about our tax services, or would like to arrange a free initial meeting in order to discuss how we can help you in more detail,please call 01932 704700 or email service@twpaccounting.co.uk