Taxes & other property costs




 
 Taxes

1 . Annual taxes
Property owners in France, pay the following taxes annually:
  • 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 on the property on the 1st January of each year.
  • a annual 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 2007

    Rate

    Up to € 760.000

    0%

    From € 760.001 to 1.220.000

    0,55%

    From € 1.220.001 to 2.420.000

    0,75%

    From € 2.420.001 to 3.800.000

    1,00%

    From € 3.800.001 to 7.270.000

    1,30%

    From € 7.270.001 to 15.810.000

    1,65%

    Above € 15.810.000

    1,80%


    Buyers should inquire about such taxes from the seller prior to any acquisition.
    • The notaire may also offert advice.

    2 .Capital gains tax
    When selling property, a capital gains 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. (If you are a resident of France, you will pay an extra 10% in French National Insurance, making the effective rate of 26%). The capital gain is computed after taking into consideration all costs related to the original acquisition and any major improvements undertaken (keep your invoices). It is reduced by 10% per year of ownership of the property after five years of ownership. Therefore, there is no capital gains tax after 15 years of ownership.  
     The notaire is responsible for the calculation of the capital gains tax and will pay it directly out of the sale proceeds. (Neverless non-residents must hire a tax representative independandly of the notaire when concluding a sale. Contact us to have the name our partners in that field.
    When selling a property to organsim in charge of low rent housing ("logement social"), capital gains tax are not payable.

    Insurance
    Under French Law, you must insure your property as soon as you purchase it; this can be arranged with the notaire or through your usual agent or bank.

    Maintenance costs
    If your property is part of a condominium (apartment) you will have to pay the co-op fees (charges de copropriété) to cover the building maintenance (roof, façade, stairs, garden, concierge, etc...). The notaire can give an estimate of such costs.