FrenchNotaire - How to acquire properties in France

Taxes & Other property costs

Taxes
1 . When owning a property in France, different yearly taxes are due:

a "taxe foncière", payable by the owner based on the average rental value of the property.

a "taxe d'habitation", payable by the person residing in the property on the 1^st January of each year.

It is advised that buyers inquire about such taxes from the seller prior to any acquisition.

The Notaire will advice on thoses matters.

a yearly wealth tax (ISF) may also have to be paid by the owner. This tax is based on the value of your French assets and is computed according to the following table:

ISF (Impôt de Solidarité sur la Fortune)

Tranches for 2006	Rate
Up to 732.000 EUR	0%
From 732.001 to 1.180.000 EUR	0,55%
From 1.180.001 to 2.339.000 EUR	0,75%
From 2.339.001 to 3.661.000 EUR	1,00%
From 3.661.001 to 7.017.000 EUR	1,30%
From 7.017.001 to 15.255.000 EUR	1,65%
Above 15.255.001 EUR	1,80%

It is advised that you consult your Notaire on this matter.

2 . When selling a property, a capital gain tax may have to be paid by the seller.
The rate of Capital Gains Tax (CGT) for both French and non-French residents, who are residents of an EU country is 16% of the net gain; the net gain is related to the number of years of ownership and other considerations such as works done,...
If you are resident of France, you will pay an extra 10% in French National Insurance making the effective rate of 26%.
The Notaire is responsible for the calculation of such taxes and will pay them directly out of the sale proceeds. (note that non residents must hire a tax representative independly of the Notaire when concluding a sale)
The capital gain is computed after taking into consideration all costs related to the original acquisition and any major improvement works undertaken (keep your invoices with you). It is being reduced by 10% per year of ownership of the property. Therefore, there is no capital gain tax after 15 years.
You will have to elect an official tax representative. Consult our partner for more information: Sarf

Insurance
Under French Law, you must take out insurance on your property as soon as you purchase it; this can be arranged with the Notaire or through your usual agent or bank.