Real Estate Tax

thThis is a simplified presentation of tax laws in France related to the acquisition, financing, possession and sale of a residence by a French tax non-resident. These laws are the same for a French tax resident.

In some cases, a tax treaty between France and the country of residence provides for a different tax. Ask us if there are agreements between your country and France.

In any case, ask us advice directly. It is possible that legal changes have been made and are not even mentioned on our blog.

Acquisition

Before any property investment in France, a foreign national must approach a professional for conditions which will be submitted this investment. Ohm Invest is available.

It is the law of the location of the property that applies to real estate, the French law will therefore be necessary.
You should know that the members of the European Union, as well as foreign countries that have signed a special agreement with France, benefit from special diets (bilateral agreement, the Hague Convention ...)

Example: a foreign national member of the European union in the country where the spouse is automatically heir and can, in his country, modify at will the matrimonial regime may simply to defeat the French law would apply in case of death (spouse heir to part only or usufructuary mere presence of children), adopt the universal community with award in favor of the surviving spouse, the full ownership of real estate acquired in France, in accordance with the Hague Convention .

Nothing also prevents foreign buyer to form a company to acquire; Again, depending on the status, legal and tax status of the acquired property will differ.

On signing the sales agreement, a contribution of 5% to 10% of the purchase price requested. This amount is deposited in an escrow account until the signing of the deed (about 3 months later). You will acknowledge the notary fees (transfer taxes, mortgage fees and various taxes) for an average amount of 6% of the purchase price.

Assignment

At an estate sale, you are liable to pay tax on the capital gain.

The tax treatment of capital gains real estate has undergone several changes in recent years the government has taken several measures including in 2014 and have added to the complexity of a tax system already difficult to access.

For more information on the taxation of the capital gain, click here.

Do not hesitate to consult our OHM Invest advisors to be oriented correctly.

Funding

The acquisition of a property in France will require sometimes significant remittances. These transfers are subject to verification by intermediaries (banks, credit institutions).

 

Real estate professionals must also verify the source of funds to counter money laundering. They may be required to make statements if they have a serious doubt as to the origin of the funds used (Tracfin).

 

Real estate professionals must also provide security for transactions which they are responsible vis-à-vis the foreign buyer and the seller. Again, they will check transfers or transfers sent to them and the seriousness of the banks that have performed.

Taxation of possession

The tax regime for property purchased in France will also be explained to the foreign buyer cost, taxes and charges.

But also the taxes payable by the use of the property: primary residence or rental investment.

The choices made when purchasing determine the tax that will apply during the detention of the property or during the subsequent resale (value added tax, capital gain, intervention of an accredited representative ...).

Very different regimes exist from the exemption to heavy taxation.

To study all these aspects, the foreign buyer of real estate in France, whatever it is, will have to consult a notary who will, before any commitment adviser and secure investment.

For more information on empty rental investment here.

To learn more about the furnished rental investment (LMP, Leaseback) here.
 
You may also need to be accountable to the solidarity tax on wealth.
To learn more about the solidarity tax on wealth, click here.