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-   -   Taxation on French Investment Property (https://www.englishforum.ch/finance-banking-taxation/244018-taxation-french-investment-property.html)

SwissMorgs 20.11.2015 11:43

Taxation on French Investment Property
 
Can anyone advise on what taxes I will have to pay on a French Investment property.

I am a Swiss resident (C Permit) and I'm thinking of buying an investment property (apartment) in France (St. Louis).

I'm aware of the fees and on-going charges I will be liable for relating to the apartment however I am not sure what taxes I will have to pay, or how they are calculated.

Do I have to submit a tax return in France each year?
What are the tax rates I will get hit with?
Is there a tax free threshold?

Can anyone help?

fatmanfilms 20.11.2015 13:17

Re: Taxation on French Investment Property
 
Quote:

Originally Posted by SwissMorgs (Post 2489090)
Can anyone advise on what taxes I will have to pay on a French Investment property.

I am a Swiss resident (C Permit) and I'm thinking of buying an investment property (apartment) in France (St. Louis).

I'm aware of the fees and on-going charges I will be liable for relating to the apartment however I am not sure what taxes I will have to pay, or how they are calculated.

Do I have to submit a tax return in France each year?
What are the tax rates I will get hit with?
Is there a tax free threshold?

Can anyone help?

You need to submit tax returns in France, social costs added to tax will make you want to cry.

Then remember CGT for the first 23 years & social costs for 30 years on a sale, you may also make a huge loss in CHF & have a huge tax bill, take care with how you finance.

SwissMorgs 20.11.2015 13:35

Re: Taxation on French Investment Property
 
Quote:

Originally Posted by fatmanfilms (Post 2489170)
You need to submit tax returns in France, social costs added to tax will make you want to cry.

Then remember CGT for the first 23 years & social costs for 30 years on a sale, you may also make a huge loss in CHF & have a huge tax bill, take care with how you finance.

Thanks for the input ... I guess I need a French accountant, or a Swiss one that knows the rules.

Can you provide more info on "take care with how you finance" ... I will not need a mortgage.

SwissMorgs 20.11.2015 14:02

Re: Taxation on French Investment Property
 
Quote:

Originally Posted by fatmanfilms (Post 2489170)
social costs added to tax will make you want to cry.

Does this still apply even after this announcement
announcement.

fatmanfilms 20.11.2015 14:36

Re: Taxation on French Investment Property
 
Quote:

Originally Posted by SwissMorgs (Post 2489235)
Does this still apply even after this announcement
announcement.

Probably not, however with French law you never really know....

Squeeeez 20.11.2015 14:51

Re: Taxation on French Investment Property
 
Quote:

Originally Posted by fatmanfilms (Post 2489267)
Probably not, however with French law you never really know....

French tax laws are some of the craziest I've ever encountered.
"Oh, we need some money. Yeah, let's create a new tax, and everybody will have to pay it, even for the past 5 years, although that tax didn't exist yet then."

Papa Goose 20.11.2015 15:06

Re: Taxation on French Investment Property
 
I have 3 investment properties in France you can buy 1 of them. Property and taxation is a total PITA, insurances and cost can be insane. Rules change at the drop of hat, taxes appear randomly, and the fees are nut crunchingly expensive.

Now it's not dirt cheap, the market is as flat as a pancake and many instances of neg equity especially in rural France. Ok if your a buyer now, but when you get fed up of the costs and hassle and want to sell.... Forget it.

I've made many investments in the past, a lot in property, and buying in France was easily the worst ( ain't hindsight grand) and unless you intend to ultimately live in it look for another destination. I'd never buy in France again.... No matter how cheap.

Phil_MCR 20.11.2015 15:13

Re: Taxation on French Investment Property
 
Quote:

Originally Posted by Papa Goose (Post 2489306)
I have 3 investment properties in France you can buy 1 of them. Property and taxation is a total PITA, insurances and cost can be insane. Rules change at the drop of hat, taxes appear randomly, and the fees are nut crunchingly expensive.

Now it's not dirt cheap, the market is as flat as a pancake and many instances of neg equity especially in rural France. Ok if your a buyer now, but when you get fed up of the costs and hassle and want to sell.... Forget it.

I've made many investments in the past, a lot in property, and buying in France was easily the worst ( ain't hindsight grand) and unless you intend to ultimately live in it look for another destination. I'd never buy in France again.... No matter how cheap.

That's what I've always said. Never, ever buy property in France.

SwissMorgs 20.11.2015 15:32

Re: Taxation on French Investment Property
 
Quote:

Originally Posted by Papa Goose (Post 2489306)
I have 3 investment properties in France you can buy 1 of them. Property and taxation is a total PITA, insurances and cost can be insane. Rules change at the drop of hat, taxes appear randomly, and the fees are nut crunchingly expensive.

Now it's not dirt cheap, the market is as flat as a pancake and many instances of neg equity especially in rural France. Ok if your a buyer now, but when you get fed up of the costs and hassle and want to sell.... Forget it.

I've made many investments in the past, a lot in property, and buying in France was easily the worst ( ain't hindsight grand) and unless you intend to ultimately live in it look for another destination. I'd never buy in France again.... No matter how cheap.

Are you issues mainly due to the locations that you are buying in?

I have a work colleague who has amassed several over a number of years and to date has had no major issues ... rent gets paid ... tenants have never been a problem to replace.

He himself lives in France and works in Switzerland, so is it due to the complexities of me working in Switzerland that generates the problems you have encountered?

What sort of tax am I going to encounter? ... should I budget for 20%

fatmanfilms 20.11.2015 15:36

Re: Taxation on French Investment Property
 
Quote:

Originally Posted by SwissMorgs (Post 2489332)
Are you issues mainly due to the locations that you are buying in?

I have a work colleague who has amassed several over a number of years and to date has had no major issues ... rent gets paid ... tenants have never been a problem to replace.

He himself lives in France and works in Switzerland, so is it due to the complexities of me working in Switzerland that generates the problems you have encountered?

What sort of tax am I going to encounter? ... should I budget for 20%

20% but keep a reserve of 15.5% for Social costs of just in case....

In France, there is a basic rate of 20% of tax on the net rental (and other) income of non-residents, although you may be able to benefit from a lower rate, depending on the level of your worldwide income.

If you wish to make application for a rate of taxation lower than 20%, then you will need to declare all your worldwide income to the French tax authorities, together with supporting documentation (with French translation). This information will need to be included on the tax return F2042C.


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