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What Property-Related Taxes Apply in France?

France is an excellent country not only for summer leisure, but also for long-term real estate investment. The magnificent landscapes, culture and excellent food encourage people to relocate. You can also make a steady profit from your own property in the form of a rental fee. To make all this possible, the purchase of the chosen property must be carried out correctly. This involves a number of responsibilities. Let’s take a closer look at this issue.

Buying real estate in France

When buying real estate in France, you need to keep in mind a number of formalities and regulations that can make the whole process difficult. In addition to the price of the flat or house itself, you have to pay property tax, notary fees and other charges. In addition, each property buyer is responsible for paying rent or mortgage instalments. It is necessary to maintain the property and the equipment and installation belonging to it in good working order. These costs should be taken into account before signing the notarial deed.

French property tax

Buying a real estate also involves paying French property tax. It amounts to 2% of the transaction value, which makes it one of the lower property taxes in Europe. In addition, the buyer of the property must pay a notary’s fee, which is about 1% of the value of the house. Additional costs may relate to the preparation of documentation, including the sales contract and obtaining other documents necessary for signing the notarial deed. Consequently, all fees can amount to several thousand euros.

Rental income tax

If you buy a rental property, you must take into account French income tax, the rates of which range from 11% to as much as 45%, depending on the amount of net income. It is worth mentioning that French residents must also pay tax for foreign properties. France is considered a primary residence if a person stays in the country for more than 183 days in a calendar year. This rule also applies to those who receive their main income in France or hold most of their assets in France. Persons arriving in France with the intention of staying indefinitely become tax residents the day after arrival.

Other taxes related to real estate

Another tax worth noting is the CFE, or Cotisation Foncière des Enterprises, which is paid annually based on the theoretical rental value of the property owned. You can get an exemption from the CFE tax provided you have a low turnover of less than 5,000 euros. The tax must also be paid after the sale of the real estate. It applies to the difference between the sale price and the original purchase price of the property. It does not have to be paid in the case of the sale of a property that is a resident’s primary residence and in the case where the property has been in the person’s possession for more than 22 years.

Professional accounting office support

The French tax system may seem complicated, so when in doubt, it is advisable to use the services of a specialized accounting office. This will give you all the information you need to properly carry out the purchase or sale of a property and pay the taxes due. Cooperation with accounting office guarantees an individual attitude to the client and speed of action. Therefore, it is worth taking advantage of the knowledge and experience of the employees of such a company.