France is a country that is firmly associated with delicious wine, fashion, and incredible cuisine. However, it is also a country with an excellent investment climate and opportunities. Buying real estate in France - a promising investment, if you approach this issue thoroughly. Even in times of crisis and pandemic rapid drop in prices did not happen, it was more about market adjustment.
The most attractive areas in terms of investment location are the Alps, the Cote d'Azur, and Paris. Prices for objects located here do not depend on the domestic economy, as the main buyers are foreign citizens. The local real estate market operates unevenly in the country. If on average in France, the cost of real estate grows by 1.7-1.8% annually, in Paris this figure is 5.7-8.2% for the same period.
Real estate taxation in France - how much, who, for what?
For more than 10 years, France has been in the top 20 countries in terms of the number of transactions with foreign nationals in the real estate market. Not surprisingly, the most popular questions from future buyers are not only about the objects, the variability of housing, its cost and payback, but also the taxation of French real estate. There is a multi-stage scheme, which is recognized as one of the most comfortable for non-residents.
Who will need to pay tax liabilities in France:
- French citizens;
- residents who reside in the territory of the state for more than 180 days annually;
- non-residents who own real estate in France - some taxes are assessed for this group at a different rate to the previous two categories.
Taxation on the acquisition of real estate
The obligation "for the acquisition and registration of property" will be adjusted based on such indicators as the type of property and its current market value. You will also need to pay a frais de notaire - "commission to the notary": between 0.8% and 6%. VAT is in the amount of 20%, most often this tax is embedded in the cost of the object.
Buying a primary residence or an object in a new building (up to 5 years), the rate is 2-3%. New buildings are exempt from tax obligations for 2 years after the building is commissioned.
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Property tax in France (taxe foncière)
This is a standard payment, it must be transferred to residents and non-residents every year on January 1 - at the beginning of the reporting period. Legislation fixes the obligation to transfer the tax for the person who is the actual owner of housing at the beginning of the reporting year. The amount of payment is formed based on the rental value of a square meter, prescribed by the municipality of the region. The worse economically developed the district, the higher the tax.
In an industrial area of the city, where there are abundant plants, factories, and production lines, the tax can be conditionally 300 euros. In the same city, in an area without production, but for an apartment with similar conditions, the owner will pay 650-850 euros.
Tax on accommodation (taxe d'habitation)
Also, a compulsory tax contribution is the taxe d'habitation. Every year on January 1, the person occupying the apartment transfers an amount accrued in advance. The funds are used to cover utility payments: removal of household waste, maintenance of landscaping, repair work, protection of the territory, etc. The taxe d'habitation is also obligatory. Even if a person temporarily does not live in this housing, you visit periodically - this does not exempt you from paying the tax. If the housing is rented by a tenant, he will pay the tax.
Every year the amount of tax is adjusted, depending on the number of residents in the apartment, income level, and market value per square meter.
Tax on renting out real estate in France (l'impôt sur le revenu locatif)
If you own a property and rent it out, prepare to share the income received with the state. The obligation is charged on the amount of the annual rent and ranges from 5% to 40%, depending on the amount of income received and the furnishing of the property. Non-residents pay a higher rate - from 20%.
To correctly calculate the amount payable, taking into account depreciation and maintenance costs, it is advisable to consult an accountant who will correctly complete the documentation.
Tax on the resale of real estate
It includes capital gains tax, social security payments, and additional tax. The total tax liability is 36-41%. The difference between the amount of the purchase and sale of the property is taxed.
Non-residents may be exempted if it is their first resale.
Luxury tax (impôt sur la fortune immobilière)
As of 2018, it is imposed on assets if their value exceeds €1.3 million. The amount will be calculated based on the total value of the property and ranges from 0.5% to 1.5%. The payer is exempt from the obligation if the object was purchased on credit and the amount of money already paid is less than €1.3 million.
Residence permit in France through the purchase of real estate
Buying real estate in France for personal use or investment purposes, the owner can not automatically qualify for a residence permit. However, if you can confirm the presence of an additional source of income outside the country, you can apply for a residence permit for financially independent persons.
Purchased real estate in this case will be an additional advantage, contributing to a positive verdict from the Commission. The obtained residence permit is valid for 1 year, after which it will need to be extended. After the residence permit, you can apply for permanent residence, and then - for citizenship. If you are interested in this condition, our employee will help with the collection and submission of documents in the country of your citizenship. Also licensed agency GARANT. IN offers assistance in solving.
