French Taxes and Taxation in France
French Property Taxes
There are two local taxes, called the taxe d'habitation and the tax foncière. The rates of tax vary across the country, due to the varying rates of tax imposed by the regional and local governments.
Taxe d'Habitation
The taxe d'habitation is payable by the occupier of a French residential property, who was occupying the property on 1st January. Even if the property was empty, if it was 'capable' of occupation, the tax is also payable.
There is an exemption if the property is incapable of occupation due to it needing extensive renovation. You can read more in our comprehensive guide to Taxe d’Habitation in France.
Taxe Foncière
The taxe foncière is payable by the owner of a French home.
Unlike the taxe d'habitation, at the time of purchase apportionment can be made between the buyer and seller, although it needs to be stated in the contract for sale.
The tax is also payable on undeveloped land. There are exemptions for agricultural land and the owners of new property are granted limited exoneration. You can read more in our comprehensive guide to the Taxe Foncière in France.
French Income Tax
If you are a resident in France, then you are liable to French taxation on your world-wide income. The level of taxation for expats who have taken early retirement, or who are of retirement age, is generally very modest.
Non-residents are obliged to make an annual return for income tax if they receive income from letting property in France.
You can offset a proportion of your liability against any income tax paid in your home country. You can read more in our comprehensive guide to French Income Tax.
French Capital Gains Tax
If you sell property in France then CGT at the rate of 16% is payable. Residents are also liable for social charges of 11%.
There is an exemption if the property is your main home, and it is levied on a reducing basis if you have owned it more than 5 years.
You can read more in our comprehensive guide to French Capital Gains Tax.
Inheritance in France
For a comprehensive review of tthis subjecFrench inheritance read our guide to French Inheritance Laws and Taxation.
There is no French inheritance tax between man and wife. However, you do not have complete freedom to dispose of your French property on your death as you might wish.
French law gives your children entrenched rights to a certain proportion of your French estate, known as the reserve legale. You can only freely dispose the quotite disponible by way of gifts or a Will.
For example, if you are survived by one child then you cannot give away any more than half your French estate either during your lifetime or by Will.
If you are survived by 2 children then this limit is reduced to one-third, and to one-quarter if you are survived by 3 or more children.
Should you have no children you are free to dispose of your wealth as you wish.
There are many ways in which you can undertake inheritance planning, notably through the use of gifts during your lifetime. You can read more in our at guide to French Gifts Tax.
Alternatively, if you are non-resident, one way of avoiding the effects of French inheritance law is to set up a company for the purpose of buying the property. Such companies are called Sociétés Civiles Immobilières' (SCI). If you own shares in an SCI, which owns the property, you can dispose of them in accordance with the law where you are domiciled.
You can read more in our comprehensive guide to SCIs at French Property Companies.
Another way is to buy the property en tontine. It quite simply means that on the death of one partner the property passes to the survivor. You can read more in our analysis of this type of property ownership ownership structure at Purchasing French Property En Tontine.
Other Information and Advice
If you haven't found what you are looking here on French taxes for please consult our guide to Taxation in France.
You can find out more about these and many other questions in our comprehensive and authoritative guides to Buying Property and Living in France.
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