Rental income from residential property in France is subject to tax, regardless of whether the owner is resident in France or not. Owners of rental properties in France, who are in receipt of rental income, are obliged to submit a tax return to the French tax office each year.
Income tax is levied on any income arising in France. For non-resident individuals, income tax is payable at progressive rates on income after allowable deductions for expenses incurred in connection with letting or maintaining the property. Furnished, unfurnished and leaseback properties are taxed differently in France.
French Tax Deadlines
The tax year in France is usually the calendar year, running from 1st January to 31st December. However, a different tax year applies for the following:
- Corporate Income & VAT Returns for Leaseback & Furnished Lettings Deadline: 30th April (the year after income was received). When the tax year does not coincide with the calendar year, the filing deadline is 3 months after tax year end.
- Personal income tax returns and for Micro-Regimes (Micro-BIC & Micro-Foncier) and Non-furnished income tax returns Deadline: End of May - mid of June.
Exact dates are appointed by the tax authorities and they tend to vary slightly from year to year. The deadline for the 2016 tax year is 19th of May 2017 if the tax return is filed by paper and 09th of June if the tax return is filed online.
Local Property Tax
Local property taxes apply in France. These are based on the value of the property and vary per region.
1. Taxe Fonciere – generally payable by the owner of the property (although it can be arranged to be paid by occupant/tenant). It includes tax on land / buildings.
2. Taxe d’Habitation – payable by the occupant/tenant of the property if rented on a long term (1 year) lease. Otherwise paid by the owner.
3. Contribution Fonciere des Enterprises (CFE) tax – a local business tax charged on the rental value of the property and chargeable to leaseback and furnished lettings. It is payable to the municipality where the property is located.
French Capital Gains Tax
French Capital Gains Tax (CGT) is payable on the sale of a property. The rate of CGT applied in France is dependent on the individual’s residency status. The tax is payable on the profit on disposal i.e. the difference between the sale price and original purchase price. Supplementary tax may be added to the CGT liability based on the level of the gain. The tax is applied at the sale in the office of the notary.
UK or Irish Residents
If you are resident in the UK or Ireland you will have to report any income received in France on your annual resident tax return (i.e. your Irish or UK tax return). There are double taxation agreements between France and Ireland and France and the UK so relief from double taxation is usually available. Your PTI account manager can provide further details on double taxation relief and/or filing your resident tax return.
The information provided here is intended as a guide only. While Property Tax International makes every effort to ensure that the information contained herein is accurate, we take no responsibility or liability for any inaccurate, delayed or incomplete information, nor for any actions taken in reliance thereon.