Question: Hi Alex, I have two apartments in Villefranche-sur-Mer, my question is, after owning them for 22 years are they both exempt from the capital gains tax in France or just one of them?

Thanks, Paul.

Answer: As I know you'll appreciate I am not an international taxation specialist, and so the advice I can give on this point will be of a general nature rather than specific to your personal circumstances.

In France CGT is paid on the sale of second homes, not on the sale of one's principal residence. So if you live full time in one of your apartments, and have done tax returns on earnings in France, then that is regarded as your principal residence and CGT is not applicable. However, if this is not the case and they are both second homes, then CGT is payable.

If you have been permanently resident in France and you are selling your principal home then any capital gain is fully exempt from capital gains tax and social charges.

In order to qualify the property must have been occupied by you on a habitual basis, although you need not actually be occupying it at the time of sale. However, if you leave the property before it is sold, you will only be entitled to claim main residence exemption if the property is sold within 12 months after you have ceased to use the property as your main home. In addition, you are not permitted to let out the property during the intervening period, or to leave other family members in occupation.

If you are selling an investment property, which does not qualify for the main residence exemption, you will benefit from progressive taper relief dependent on how long you have owned the property.

There are separate scales applying to calculate the gain subject to tax and the gain subject to social charges:

• the gain subject to tax is reduced by 6% for each year of ownership after the 5th year up to the 21st year. A reduction of 4% applies in the 22nd year, giving 100% relief after 22 years,so on the face of it it looks like you may well benefit from this exemption.

• the gain subject to social charges is reduced by 1.65% for each year of ownership after the 5th year up to the 21st year. A reduction of 1.60% applies in the 22nd year, followed by a reduction of 9% each year from the 23rd to the 30th year. This provides for 100% relief after 30 years, so it may be that there is a social charge element for you to pay.

As always I would advice taking tax advice specific to your circumstances, and of course these rules do change in France quite regularly, so it takes a tax professional to be fully up to date with the very latest developments.

I hope that has at least been of some assistance.

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If so I will answer it....

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For everything you need to know about French property visit www.clefrance.co.uk

Hi, Alex here!

At Cle France we get questions asked all the time and I don't think I can recall a question being posed that we could not answer or at the very least point our client in the right direction.

No doubt following the UK decision to leave the EU you may have a lot of questions surrounding this subject and indeed anything connected with searching for, viewing, making an offer, the buying process, owning a French property and moving to France etc.

If you have a question? I will answer it.

Simply fill out the form below and I will get back to you very soon.

NOTE: Scroll through these pages to see Previously Answered Questions.

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Question: Hi Alex, please could you tell if British people are still allowed to emigrate to France and acquire property. I ask you this because i would like to sell my properties in Britain and move to France.

Thanks, Philip.

Answer: Hi Philip, British people do not need to “emigrate” to France, it is not as complicated as that because within the EU countries there is free movement of people. The “Leave’ vote on the 23rd June has not changed anything at all, for the moment, until the PM or his successor invokes ‘Article 50 of the Lisbon Treaty’.

At the moment of course there is an air of uncertainty but you will always be able to move to and to live in France, it just maybe that in the future there may have to be more paperwork involved and we do that with you anyway. At the moment it is looking more and more likely that the free movement of people within the EU will not change greatly if at all.

Also it is worth pointing out that everyday we sell French property to Americans, Australians, Russians, South Africans and many other people from various nations and NONE of these are even in Europe let alone the EU so, as I can see it, there is nothing to stop you following your plans and you will find, like many do and I did that living in France is a wonderful thing to do.

For everything you need to know about French property visit www.clefrance.co.uk

Question: I am a British Ex-Pat already living in France, with a "Brexit" what happens next for me?

Answer: The short answer is... Nothing yet.

Following the vote to leave the EU and the inevitable shock waves in the UK, Europe and around the globe there has been surprisingly little done or agreed about the way forward.

David Cameron announced that he will stand down as Prime Minister, but not until October, so for now he will remain where he is to 'Steady the Ship' over the coming months. He said in his speech directed to Ex-Pats in the EU:

"I would also reassure Brits living in European countries, and European citizens living here, that there will be no immediate changes in your circumstances. There will be no initial change in the way our people can travel, in the way our goods can move or the way our services can be sold."

"We must now prepare for a negotiation with the European Union. This will need to involve the full engagement of the Scottish, Welsh and Northern Ireland governments to ensure that the interests of all parts of our United Kingdom are protected and advanced."

Leaving the EU has to be negotiated, it is not an overnight thing, it may take many years and certainly at least two years. Even if the UK government invokes 'Article 50' of the 2009 Lisbon Treaty, it will take at least two years before the exit is agreed by the other Member States of the EU.

Mark D’Arcy the BBC’s parliamentary correspondent. said...

"Parliament would have to amend or repeal a series of other Acts, as well as 44 years’ worth of EU-derived secondary legislation, especially statutory instruments passed under Section 2(2) of the 1972 Act, which would have no legal effect after it had been repealed".

So, there are many steps to take but for now, and in the near future... nothing has changed.

For everything you need to know about French property visit www.clefrance.co.uk

There are two basic local property taxes in France which are, sort of, the equivalent to the UK council tax; only much cheaper of course, they are called Taxe foncière and Taxe d’Habitation

In brief the Taxe foncière is a land tax, and is paid by the owner of the property and the Taxe d’habitation is a residence tax. You have to pay this tax if you own a property and live in it yourself (or have it available for your use, or rent it out on short-term lets, basically if it is habitable and furnished rather than a renovation project). Where properties are rented out long-term [not just holiday letting], the tenant pays.

Both taxes apply to non-residents as well as residents, and are often higher on second / holiday homes than on main residences due to possible discounts on the main home.

Demands for both taxes are sent annually, the bills or avis d’impot start going out in September each year. The amount must be paid by a specified date, usually in October (taxe foncière) and November (taxe d’habitation) but vary from region to region. Failure to pay on time incurs a 10% penalty called a 'majoration' and these are imposed strictly so don't delay any payment and you cannot use 'La Poste never sent it to me in my country of residence' as an excuse.

Payments can be made by cheque, interbank payments, bank transfers or online. There is more time to pay online, the deadline is usually extended a few weeks later than for the paper version.

Taxe foncière

Taxe foncière tax is paid by the owner of the property, irrespective of who occupies it. The tax is divided into two parts: tax on buildings (taxe foncière sur les propriétés bấties) and tax on land (taxe foncière sur les propriétés non bâties). The latter is no longer levied locally and is levied nationally instead. The tax on buildings is paid on any property that is habitable, whether or not it is occupied.

If you sell a property part-way through the year the tax is apportioned by the notary dealing with the sale.

An exemption is available against the main home if the occupant is 75 or over (or in receipt of certain disability or old age allowances) as at 1st January of the relevant year, based on the level of taxable income in the previous year. The calculation, which also applies to the exemption for taxe d’habitation, depends on the number of “family quotient” (quotient familial) units available.

For the 2015 taxe foncière, the maximum income levels based on 2014 income is €10 686 for the first family quotient unit (so this is the limit for a single person), and then €2,853 for all extra half units.

Where the taxpayer is aged between 65 and 75 at 1st January and their taxable income falls below the above limits, a flat €100 discount is available against the taxe foncière payable on their main home (unless they share the house with anyone other than a spouse or dependant).

Exemptions and reliefs are available on land used for certain purposes such as farming.

New buildings and renovated properties used as the main home are exempt from taxe foncière for the first two years after construction. Renovated properties can benefit provided that reconstruction or additional construction work has been carried out, and is determined according to the nature and size of the work. A special Tax Form (H1 or IL) must be filed with the local tax authorities within 90 days of completion of the property or renovation works.

Taxe d’habitation

Taxe d’habitation is determined by local and county councils and is spent on community services by your local municipality. It is paid by the household living in the property on 1st January each year, whether it is an owner or tenant, or by the owner if vacant.

The tax is based on a notional rental value for the property multiplied by the tax rate fixed in the locality. The rental value is assessed by the land registry (cadastre) to which you must send notification of any improvements or changes to the property within 90 days. It is possible to appeal against their decision, but the margins involved are generally small.

There are various deductions available on the main home for people on very low incomes or with dependents. For example, three children would attract a discount of 35% of the average taxable value for the immediate area. These percentages can be further increased by 5%-10% per dependent if the municipality decrees.

Also, a couple with three children would start to see further discounts of 1%-15% where their annual household income did not exceed a certain threshold (€10,686 for the first family quotient unit – so this is the limit for a single person – and then €2,853 for all extra half units) provided the valeur locative [the rental value according to the land registry] of the main home is below 130% of the average valeur locative in the area.

For people aged over 60 or for widows/widowers (no age restriction) who occupy the property as their main home as at 1st January and who are not subject to wealth tax, if their net taxable income does not exceed €10 686 for a single occupant, or + €2,853 for each additional ‘half-part’, an exemption for taxe d’habitation is given. The 2014 taxable income is taken into account for calculating the exemption available against the 2015 taxe d’habitation.

Taxe d’habitation also applies to mobile homes and caravans if they are the taxpayer’s main residence. The rate is €25 per square metre but is not payable if the surface area is less than four metres squared.

Note that for both taxes, most exemptions apply to the main home, and as such will not apply if you are not French tax resident.

Blog submitted by: Alex at The French Property Network - Cle France.

Original material by Sylvia Edwards Davis, a freelance journalist based in France, focusing on business and culture.