Peculiarities of French Property Taxes

Peculiarities of French Property Taxes

The French real estate taxation system is not the easiest in the world. Being a non-resident owning real estate in France, you are obliged to pay the same taxes like the citizens of the country. There are two kinds of taxes in France that you necessarily have to pay. First, the residence tax (taxe d’habitation) and the property tax (taxe foncière). There is also a luxury tax, but this issue is solved by the value of the property.

Tax on Accommodation (Taxe d’Habitation)

Residential tax is levied on any person residing in France. Actually, the main object of taxation is the person occupying the living space, and he should pay this tax every year.

The tax on accommodation varies and depends on the cost of renting the land. The exact amount of tax determine the tax centers of France. Then, they apply a rate to get the amount of your tax on accommodation, therefore, depending on the type of property and its location, the amount of tax will differ.

Property Tax in France (Taxe Foncière)

Property tax is the second mandatory tax, for the payment of which you will be liable. This tax is local. It must be paid annually by the property owner, regardless of whether he is a tax resident or not. The tax itself is levied directly by the municipality where your property is located. Unlike a residence tax, you must pay this tax to the tax inspectorate, even if you rent out housing.

As well as the tax on accommodation, the amount of property tax is calculated on the basis of the rental value of the land cadastre. Multiplying the cost of renting a land plot at the rate set by the municipality where the property is located, the tax authority determines the amount payable. You will receive a notice of payment with the exact amount of the calculated tax each year at the end of August. The deadline for payment will also be specified in the notification.

Luxury Tax

A tax on luxury is a tax directly related to real estate. It is imposed on the owners of one or more properties in France when the total value of their assets exceeds €1,300,000. The fact that you are not a tax resident of France does not exempt you from paying this tax. However, it only takes into account the value of your property in France and not all of your personal assets.

As for the scale of this tax, although the threshold is indeed €1,300,000, the calculation scale starts from €800,000. To calculate the amount of this tax, you must begin by estimating the net taxable value of your assets. This is achieved by calculating the difference between the gross value of your assets and deductible payments.

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