Taxes on real estate in France: on the purchase, maintenance, accommodation, sale for citizens and residents
For more than ten years, France is on the list of TOP-20 countries selling real estate to foreign residents. This is not surprising: the rich history of the country, unique areas for rest , a developed economy and other advantages make France a comfortable country for living and recreation.
One of the most frequent questions that customers ask us is about taxes on the purchase and maintenance of real estate on the Cote d'Azur . And here are all the same laws as for France.тThe SYSTEM taxation, frankly, is not the easiest, but it is considered one of the most attractive for non-residents.
And before we’ll start to disassemble all the nuances - what is coming to pay for, let’s find out who will have to pay:
- French citizens;
- resident living in France 180 days or more per year.
Taxes on the purchase of real estate in France
The tax is called: "For the acquisition and registration of property". And its size depends on the type of real estate and market price. It is necessary to pay frais de notaire - “notarial remuneration" at a rate from 0.8% to 6 %. And also the VAT at a rate of 20%. Standard practice when VAT is already included in the price of housing. The percentage of the commission to the notary depends on the value of the object of the transaction and looks like this in advance:
- 0- 6.5 00 € - 3.945 %
- 6.5 01 - 17 , 000 € - 1.6 27 %
- 17.001 - 60 , 000 € - 1, 085 %
- More than 60 , 001 € - 0.8 14 %
Of good: the purchase of primary housing, as well as real estate in the new buildings (up to 5 years) is taxed at 2-3%. And also a bonus - new building is exempt from tax for 2 years after commissioning - you can save your money greatly if declare your deal on time.
Property tax in France ( taxe foncière)
Annual mandatory payment. If you are already lucky enough to own real estate in France - be ready to paid systematically to tax inspection direct for it every January 1. By law, the one who owns the squares at the beginning of the calendar year pays. The amount depends on the rental value of the square set by the municipality of the region in which your house is located. Conventionally, this is 0.5-1.5 cost of rent per month. The less economically developed a region is, the higher the property tax will be.
For example, in the district of Paris, where is a production,an apartment of 50 sqm. and with its price of 200 thousand euros will cost 400 euros of annual tax. But in a similar area where there are no enterprises, under the same initial conditions, the property owner can pay 600-800 euros per year.
Paris, Cote d'Azur, Provence, large cities with various factories and enterprises are considered the “cheapest” tax zones for housing.
If you are renting out or planning to rent out a property, remember that you will still have to pay tax. Unlike the next payment.
Tax on accommodation in France ( taxe d'habitation)
Another obligatory annual payment that is imposed on a person who occupies a living space on January 1 (the annual payment is charged at the beginning of the year ). Money intend to community needs: garbage collection,scavengery, landscape care and maintenance, security, repair work, etc. Even if you temporarily do not live at the address, you rarely visit your house or completely moved out, and the house was “sealed” - you still have to pay - taxe sur locaux vacants.
If you rent out a property - the tenant will pay.
The amount may vary each year and depends on the composition of the family, income, market price for rent square meter As practice shows, the tax amount often coincides with a similar payment on real estate.
Property rental tax in France ( l'impôt sur le revenu locatif)
Tax on rental income is inevitable if you plan to rent out your property. It is subtracted from the sum of annual rent and varies from 5 to 45% depending on the received assets (the sum of annual rent), as well as parameters - furnished or not furnished one. For non-residents, the tax amount starts at 20%. Also, to pay social fees in the amount of 15.5%.
The scheme looks like this:
- Earnings up to € 6,000 - 5%
- 6,000-12,000 - 10%
- 12,000-26,500 - 15%
- 26,500-71,000 - 20%
- 71,000-150,000 - 41%
- Over 150,000 - 45%
To correctly calculate the total amount, deduct the costs of depreciation and maintenance - it is recommended to contact an accountant to fill out the declaration.
Real Estate Resale Tax
This tax includes capital gains tax ( Impôt sur les plus-values ) , social payments , additional tax and costs 36-40.5 %;
- 2- 6% - payment of notary fees;
- 15.5% - social fee;
- 19% - for capital gains.
The tax is not charged on the entire amount of the sale, but only from the difference. That is difference between the purchase price and the sale price of property.
There are a number of nuances that can reduce the total amount of capital gains tax:
- for non-residents, the first sale of housing may be exempt from tax on the increase in assets subject to the conditions - you should contact the notary and the accountant for the proper execution of the necessary documents;
- If you owned a property in the period of 6-21 years - 6% of the amount can be saved.
- with those who sell property owned by more than 22 years, no tax is levied at all.
Discounts are also provided for social fees (takes away from 15.5%):
- non-residents who do not use the social security system are exempted from tax;
- 1.65% subtracted if the owner was in the ownership of 6 to 21 years;
- 1.6% - for owners with experience of 22 years;
- 9% subtracted if the real estate has been owned for 23-30 years;
- more than 30 years - the owner is exempt from paying tax.
Additional tax (up to 6%) is calculated from the amount of capital gains:
- 50-100 thousand € - 2%
- 100-150 thousand € - 3%
- 150-200 thousand € - 4%
- 200-250 thousand € - 5%
- Over 250 thousand € - 6%
Luxury tax in France ( impôt sur la fortune immobilière)
In 2018 it has been revised and is now charged only on assets (of real estate )with price in the amount of 1.3 million euros or more. The amount of tax is calculated from the total price of the property. For today persent look like this:
- 800,000 - 1,300,000 € - 0.50%
- 1,300,000 - 2,570,000 € - 0.70 %
- 2,570,000 - 5,000,000 € - 1%
- 5,000,000 - 10,000,000 € - 1.25%
- more than 10,000,000 € - 1.5%
However, there are opportunities to get away from paying a luxury tax in the case
- real estate was purchased on credit and the amount of current assets paid is less than 1.3 million €;
- the part of the assets is furnished property for renting out.
For clients of the agency Hermitage Riviera, there is assistance and support in dealing with tax issues for each type of transaction: purchase, lease or sale.