Cash in on Our Advices on Taxation in France & French Property Taxes

Learn about the French tax system with InvestFrance.com. We are here to help foreign investors in any way they need and bring them useful facts and articles free of charge. On this page we refer to taxes in France and how they may affect your investments in the country. Remember though that InvestFrance only offers a summarized version of this topic and be advised that further reading and research are necessary before making financial decisions.

Different Local Taxes in France

Tax rates vary across the country as a result of the changeable rates of tax being set by the regional, national and local authorities. It is somewhat confusing for foreign investors at first, but the rules are quite simple and with some basic research and understanding are extremely easy to master.

When you decide to invest in France and learn about the French taxation system bear in mind that there are two main local taxes you should take into consideration: Taxe d'habitation and the tax fonciere.

Taxe d'Habitation

The taxe d'habitation has to be paid by all inhabitants of France's residential property, who are living in the assets on January the 1st.

In case the property is not suitable for living (due to massive renovation works and the like) then there is an exception.

Taxe Fonciere

The taxe fonciere has to be paid by anyone who owns a French homeand it must be stated in the contract for sale.

Notice that the taxe fonciere has to be paid on undeveloped land. There are exceptions for agricultural property, which usually enjoys high levels of sublimities in France, and the possessors of new possessions are also granted for limited deductions.

Know Your Rights Regarding French Income Tax

If you are a resident in France, you are legally responsible to French taxation on your world-wide earnings. The taxation level for exiles who have taken early retirement or who are of retirement age is exceptionally fair.

Non-residents are required to make a yearly return for income tax in case they receive profits from leasing property in France. You can deduct a proportion of your income tax obligation against any income tax paid in your home country.

French Capital Gains Tax

If you sell property in France you have to pay CGT at the rate of 16%. Residents are obligated to social charges of 11%. There is an exception in case the property is your core residence, and it is taxed on a reducing basis if you are the owner of that property for more than 5 years.