Property tax services / France / FAQs

FAQs

  • What is the French Leaseback Property Scheme?
  • The French Leaseback property scheme was created by the French government to encourage investment and development in tourist regions throughout France. Property bought through a leaseback scheme involves a contract between the investor and a property management company that will manage and rent the property for a fix period. The main characteristics of a leaseback scheme are that the property must serve as a holiday accommodation for a minimum period. Where a French VAT is charged on the purchase price of the property it can be claimed back once the required conditions have been met.
  • I have a French leaseback property, what are my French tax obligations?
  • As a non-resident French leaseback property owner you are obliged to file a French business tax return and a French personal tax return. Under the French leaseback scheme rental income incurs French VAT at a rate of 10% (since 2014 tax year) which means that a French VAT return also must be filed as VAT is charged on rents received. A new VAT regulation (since October 2012) states that non-residents do not have to pay and receive VAT on top of rents. The responsibility in respect of this lies with the management company.
  • I have a French furnished property, what are my French tax obligations?
  • As a non-resident French furnished property owner you are obliged to file a French business tax return and a French personal tax return. Income from French furnished property is treated as commercial income. Non-resident French furnished property owners with French Income can benefit from a simplified scheme of French tax return called Micro-BIC. This method of taxation allows a notional deduction of 50% against your rental income when arriving at your French taxable income. Alternatively, you can opt out of this regime and file your French income tax on an actual receipts/costs basis.
  • I received rents from my French unfurnished property. What are my French tax obligations?
  • As a non-resident French unfurnished property owner you are obliged to file a French personal tax return. Income from land or unfurnished buildings is taxed on income received less allowable expenses. Non-resident French unfurnished property owners can benefit from a simplified scheme called Micro-Foncier. This method of taxation allows a notional deduction of 30% against your rental income when arriving at your French taxable income. Alternatively, you can opt out of this regime and file your French income tax on an actual receipts/costs basis.

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