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The French Property Network

Jun 10

French Property Tax Explained

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.

Tax Fonciere

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.

Tax Habitation

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.

Cle Mortgages

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. 

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Mar 8

French Bank Holiday dates 2016

Just updating the Cle France Office calendar and thought this was useful information for those booking and planning property viewings in France.

There are 11 official public holidays in France. The Alsace region and the Moselle department observe 2 additional days. Contrary to most countries, these holidays do not shift when they fall during a weekend. As an example in the UK they move the May and August Bank holidays to the nearest Monday but in France if May 1st is on a Sunday, which it is this year, then that Sunday is the bank holiday, not good news for the workers eh!

Planning a viewing trip?

If you are planning a viewing trip to view some of the super property we have for sale in France then these dates could help you plan, even if they give you the days to avoid as offices and shops will be closed.

Remember - most Estate agents don't work Sundays and depending on the region of France Saturdays get booked up very quickly so you will need to give us more notice than you would for a weekday, which will be easier to plan for at shorter notice.

Cle France blog

So here are the Bank Holiday dates / jour fériés in France for 2016

Jan 1 Friday is New Year's Day is a National holiday

Mar 20 Sunday is March equinox Season

Mar 25 Friday is Good Friday is only a Local holiday

Mar 27 Sunday is when Daylight Saving Time starts

Mar 27 Sunday is Easter Day - Observance

Mar 28 Monday is Easter Monday is a National holiday

May 1 Sunday is Labour Day / May Day is a National holiday

May 5 Thursday is Ascension Day is a National holiday

May 8 Sunday is WWII Victory Day is a National holiday

May 15 Sunday is Whit Sunday - Observance

May 16 Monday is Whit Monday is a National holiday

May 29 Sunday is Mother's Day - Observance

Jun 19 Sunday is Father's Day - Observance

Jun 20 Monday is June Solstice

Jul 14 Thursday is Bastille Day is a National holiday

Aug 15 Monday is Assumption of Mary is a National holiday

Sep 22 Thursday is September equinox

Oct 30 Sunday is when Daylight Saving Time ends

Nov 1 Tuesday is All Saints' Day is a National holiday

Nov 11 Friday is Armistice Day is a National holiday

Dec 21 Wednesday is December Solstice

Dec 24 Saturday is Christmas Eve - Observance

Dec 25 Sunday is Christmas Day is a National holiday

Dec 26 Monday is St Stephen's Day is a Local holiday

Dec 31 Saturday is New Year's Eve - Observance

Please note: A lot of business and shops, Post offices etc will be closed in France on these days.

Cle Mortgages

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

Add CommentViews: 2523
Feb 9

Transgenerational French Estate Planning

When it comes to French inheritance taxes, French property owners forget too often that they can limit the fiscal cost of the transmission of their French assets over their loved ones by careful estate planning.

Since 2006

A donor can gratify in a shared gift descendants of different degrees, for example his/her children and grandchildren.

With the agreement of the children, it is possible to transmit a French property to the grandchildren or to transmit the life interest of the property to the children and the bare ownership to the grandchildren.

This operation of transmitting a property or other assets over two generations will increase the number of Inheritance tax allowances applicable for the calculation of the gift taxes.

Example

Indeed, a parent can give to each of his/her children €100,000.00 and €31,865.00 to his/her grandchildren tax free.

For example, a couple with 2 children and 4 grandchildren can transmit tax free €654,920.00: (€100,000 X 2 children) + (€31,865 X 4 grandchildren) X 2 parents.

In the case of French property, this estate planning operation can be advantageous if the property was purchased by a suitable holding company such as an SCI (“Société Civile immobilière”). The SCI enables its members to transfer gradually their shares to their children or grandchildren. The French SCI is commonly used by families as a vehicle to organise the transmission of assets between members of a family. An additional benefit will be that each parent can transfer every 15 years some of his/her shares to his/her children and to his/her grandchildren with the same tax allowances mentioned above.

Furthermore because of the difficulty to sell the shares of an SCI to another person or a shareholder of an SCI, the shares of an SCI can be devalued by 10-20% justified by the insertion of an approval clause (“clause d’agrément”) in the “statuts” of the company. The value of the shares would be 10-20 % less than the value of the property reported in the number of shares.

Please note that this transgenerational inter vivos gift may also involve assets which have already been donated to children. It is then possible for the children to pass their assets to their own children in favourable tax conditions.

Family Estate Planning

This article was written by Loic Raboteau, French Legal Advisor and director of French Legal Consulting.

Francophile legal Consulting can assist you with international property matters. For more information on this topic, please do not hesitate to contact Loic Raboteau, managing director by completing the form below. 

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Jul 18

Dealing with Computer Problems in French

Getting Technical in French

It can be frustrating when your computer won't do want you tell it to do! dealing with computer problems in your own language is bad enough so imagine trying to deal with it in French!

A client of our posed this problem...

Last week mon ordinateur était en panne (my computer was broken) and I had to go to le magasin d’informatique (the computer store). I was worried that mon vocabulaire d’informatique (my computer vocabulary) wasn’t good enough and that I wouldn’t be able to explain the problem. On top of that, with la canicule, it was so hot I just didn’t want to do anything!

Computer Problems in France

 Here is some basic vocabulaire, which should be enough to help you to be able to say what you need.

Par exemple (for example), how to say:

There seems to be a problem with the boot sector, and I’m afraid the hard drive has failed.

Il me semble qu’il y a un problème avec le secteur boot et j’ai peur que le disque dur ait échoué.

He understood! Although I quickly learned boot sector is le secteur d’intialisation and not le secteur boot. However his prognosis made my feelings of success short lived.

Ça va prendre cinq jours au moins et si c’est le disque dur, ça va couter 500 € (cinq cents euros) pour le remplacer et l’installer, plus le coût de main d’œuvre.

It will take five days and if it’s the hard drive, it will cost €500 to replace it and install it, plus labor costs.

I wasn’t prepared to pay €500, so I asked:

Est-ce que je peux le faire moi-même ?

En fait, si vous voulez, utilisez une live DVD Linux et voir si les données sont toujours là. Alors vous allez savoir si le disque dur est en panne ou non.

C’est une bonne idée !

Can I do it myself?

In fact, if you want to, use a Linux live DVD and see if the data is still there. Then you will know if the hard-drive is broken or not.

That’s a good idea!

I bought un DVD and une fois à la maison (once I was home), his idea worked! I could sauvegarder (backup, save) all my files and nothing was lost!

Voici une liste de mots d’informatique :

La batterie/la pile battery

Le bug, l’erreur glitch, bug (computer problem)

Le clavier keyboard

Le Disque Dur Hard Drive

Les données data

L’écran (m) screen

Effacer, supprimer to delete

Le fichier file

L’imprimante (f) printer

Imprimer to print

L’informatique (f) Computing, computer science, programming

Installer to install

Le lecteur CDROM CDROM player

Le logiciel program (software)

Le lien link

Le matériel hardware

La mémoire memory

La mise-a-jour update

Mettre à jour to update

Le moniteur monitor

L’octet (m) byte

L’ordinateur (m) computer

Le plantage crash

Le réseau network

Le site web website

La touche key (of a keyboard)

Le serveur server

Le son sound

La souris mouse

Le système d’exploitation Operating system

La Toile The Web

La sauvegarde backup, save.

Cle Mortages 

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

This blog was originally posted on The French Language Blog pages.

Add CommentViews: 3110
Dec 30

Is there a New Tax on Holiday Homes in France?

The tax you have read about is at this stage merely a proposal and for most people buyiung in rural France it does not concern you anyway, but if you are looking to buy in an urban area there are some things to note.

According to a report in a French daily newspaper Les Echos, second homes that are located in areas where there is a housing shortage could face an increase of 20% on their Taxe d'Habitation.

This measure is being considered by the government and could apply in 28 urban agglomerations in France, known as zones tendues, where a tax on vacant homes is already in place.

These areas are: Ajaccio, Annecy, Arles, Bastia, Bayonne, Beauvais, Bordeaux, Draguignan, Fréjus, Genève – Annemasse, Grenoble, La Rochelle, La Teste-de-Buch – Arcachon, Lille, Lyon, Marseille – Aix-en-Provence, Meaux, Menton – Monaco, Montpellier, Nantes, Nice, Paris, Saint-Nazaire, Sète, Strasbourg, Thonon-les-Bains, Toulon, and Toulouse.

Most international home owners with country / rural properties in France will not therefore be affected, although holiday homes in some popular coastal resorts will face a tax hike. But unless you are buying in one of these areas you will be unaffected.

That said it is difficult to give you a 'typical' scenario because taxes vary from commune to commune, and of course utilities vary so much according to usage.

Other charges by comparison: Electric and water etc. are about the same as the UK, and people generally find annual Taxe Fonçière and Taxe d'Habitation compare very favourably indeed, these are in general 5,6,7+ times less than in the UK.

Cle Mortgages

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

Add CommentViews: 2476

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