Owners of property in France are liable to pay taxes on their property in a number of situations. The most significant of these concern income resulting from property, such as rental and French regional taxes.
Taxes on property revenue:
Income tax in France is based on where you carry out your professional activity. The type of tax you will have to pay on your French property revenues, should you decide to let, will depend on where you live and work - on whether or not you are a French resident. Taxation conventions exist between France and other countries, which protect you from paying taxes twice. Most bi-lateral tax conventions state that properties which exist in France will be taxed only in France.
For French residents:
You are a full time resident working in France, and the owner of a French property which you let. The taxes on your property income are calculated based on total annual property revenues minus annual interest payments on your loan. They will be incorporated into your overall tax assessment, which is determined by your professional income.
Non-resident owners of property in France are required to pay a fixed tax on property revenues. This is initially calculated as for French residents on the total annual property revenues minus annual interest payments on your loan; however, non-residents then pay approximately 25% of this sum.
French regional taxes:
- All home and land owners in France must pay a local property tax known as a taxe foncière. This tax is based on the rateable value according to the location, the type of building, the surface area and the comfort criteria.
- If your home in France is your principal or holiday residence, you will also be required to pay an occupancy tax, or a taxe d'habitation. Occupancy tax is based on the rental value of the property defined by the land registry and local authorities.
It is important to be clear about what tax payments you will be liable for in relation to your property. Do not hesitate to seek advice from an independent tax consultant, the French tax authorities or your notary