As a property owner in France, you pay a range of taxes. This article provides an overview of the various French taxes on property. Here, we distinguish between non-rented property and rented property.
You do not rent
If you do not rent, you will basically only pay local taxes. First, there is the property tax (taxe foncière). This tax is payable by any owner or usufructuary of property in France.
In addition, there is a tax (taxe d'habitation) for (furnished) real estate that you can make effective use of. By this we mean real estate that is at your disposal. This may be as owner or usufructuary, but also as tenant, for example. This municipal tax applies to both main residence and second residence. The taxe d'habitation will probably go out in 2023 for primary residence.
The above taxes are calculated on the basis of cadastral income and are taxable as at 1 January.
Finally, a number of local French property taxes are possible, such as a waste tax.
You rent out unfurnished property
If you rent out property in France unfurnished, two regimes are possible. The first possibility is the regime micro-foncier. If your rental income is less than €15,000 per year, this regime automatically applies. You will then be taxed on the basis of the actual rental income, less a cost lump sum of 30%.
If your rental income exceeds €15,000, the ordinary rental regime automatically applies. Here, you are also taxed based on the actual rental income, but you can deduct your expenses. For example, consider the tax foncière, interest, insurance, repairs, etc. Losses are transferable under certain conditions.
Even if your rental income is below €15,000, you can opt for the ordinary regime. This choice remains valid for 3 years.
Partners in an SCI should declare their rental income in proportion to their share in the SCI.
You rent out furnished property
In this case, French property taxes are divided into similar regimes. First, there is the regime for the micro-entrepreneur. Here, you basically have less than 70,000 euros of rental income per year. You will then be taxed on half of the actual rental income (automatic flat rate). If you rent out rooms via a gîte or B&B, the cost lump sum is in principle 71%.
In addition to the regime of the micro-entrepreneur there are the ordinary professional incomes (industrial and commercial benefits), where you are taxed on your actual rental income less deductible expenses.
You basically have a choice between the two regimes. There are also social taxes amounting to 17.2% on receipts.
French property tax rates
Using the above regimes, calculate the taxable base. This amount is added together with any other income taxable in France. The progressive personal income tax rates apply to the total income (0% - 45%).
However, there is a minimum rate of 20% for non-residents. In addition, there is a solidarity contribution (prélèvement de solidarité) of 7.50%.
A example: you rent out an unfurnished property for €8,000 a year under the regime of micro-foncier. You are entitled to a cost flat rate of 30%. The taxable base is then 5,600 euros. The tax payable on this is 20% or €1,120.
Finally, you pay wealth tax in France from the moment you have a net property wealth of €1.3 million there.
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