Tax warning for second-home owners with French carte de séjour

Tax warning for second-home owners with French carte de séjour
Photo: Sebastian Bozon/AFP
British second-home owners in France who have acquired a post-Brexit carte de séjour are being warned of potential tax problems.

The post-Brexit carte de séjour was intended for Brits already living in France before the end of 2020 as a relatively easy way to regularise their status. However in the case of some second-home owners, this could lead to trouble with the French tax man.

Who’s affected?

We’re mainly talking second-home owners here.

Brits who are not full-time residents in France but who own property here must now either get a visa or limit their visits to 90 days in every 180. 

EXPLAINED How does the 90-day rule in France work?

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See also on The Local:

The carte de séjour is intended for people who have France as their full-time address. However it seems that some second-home owners – perhaps after receiving advice or through a misunderstanding of the system or even the belief that they have found a loophole – have acquired a post-Brexit residency card.

Those who live full-time in France are perfectly entitled to get a carte de séjour – indeed it is now a legal requirement to have made the application for one.

Slightly confusingly, there is also a different card known as a carte de séjour visiteur which is open to second-home owners – find out more about this here.

But the post-Brexit card, sometimes referred to as a WARP (withdrawal agreement residency permit) or referred to by the French authorities as an Article 50 TUE (referring to article 50 of the Traité sur l’Union européen or EU treaty) is only for people who have had their full-time residence in France since at least December 31st 2020.

There’s no official data on this, but various Brexit-focused Facebook groups have reported that some second-home owners have been able to get a post-Brexit card and The Local has also been contacted by people who have either done this or know someone who has.

How has this happened?

When the time came to regularise the situation of the roughly 200,000 Brits living in France before Brexit, France opted for a fast-track system that made the process as straightforward as possible.

Many long-term residents were surprised at how simple the process was and how few supporting documents were needed – but this was a deliberate choice by French authorities, intended both to make the process simple for their own administrators but also to ensure that vulnerable residents – such as pensioners on low incomes – were not incorrectly denied the right to stay in a country that had become home.

Very few residency applications were turned down. Those that were denied were almost all on the grounds of serious criminality.

But while the system came as a great relief to many who had been desperately worried about being able to remain, it did also mean that people who owned property in France – and therefore had documentation like French utility bills and bank accounts – were also able to register for residency.

Is this a problem?

It could eventually be a problem because by requesting a post-Brexit carte de séjour, the person in question is telling French authorities that they are a full-time resident in France – which is why they are no longer constrained by the 90-day rule.

But if that person is in fact a second-home owner, then they are in reality a resident of the UK.

So what could happen?

Ultimately, Brits who own second homes in France and own a carte de séjour are telling  different governments different things. They are telling the French that they live in France and the British that they live in the UK. This is likely to cause some problems in the future.

It’s not a question of French authorities breaking down doors and snatching back the carte de séjour, but interactions with officialdom will likely eventually become a problem if you’re telling different stories.

And it’s likely that the first issue will be with the French taxman.

Taxes

All residents in France are legally required to file an annual tax declaration – even if you do not earn any money in France.

READ ALSO Who has to make a tax declaration in France?

By acquiring the carte de séjour, you have told France that you live here, so by not filing the annual return you are breaking the law.

People who realise they have made a genuine mistake and go to the tax authorities are generally treated pretty leniently, but if you continue to not do the declaration despite declaring yourself as a resident you could be facing fines and a lengthy investigation by the tax office.

When making the tax declaration you also make a sworn declaration that your main address is in France (non-residents who have income in France use a different form). Making a false declaration is a criminal offence with a maximum penalty of one year in prison and a €15,000 fine. This penalty can increase up to three years in jail if the false declaration is made to a public official.

It’s perfectly legal to file tax declarations in both France and the UK – indeed it’s required for many people who have economic activity in both countries – but remember that providing false information on a tax return is a criminal offence in both France and the UK.

Find full details on the French tax declaration HERE.

Other issues

Time out of France – you can lose your residency status if you spend too much time out of France. This is not generally an issue for full-time residents, but if you don’t really live here then your time in the UK could end up disqualifying you. Different cards have different limits – full details here.

Healthcare –  If you are, according to French authorities, living in France then you should apply for a carte vitale in order to register in the French health system. This requires another sworn declaration that you live in France in a “stable and regular manner” or work in France. 

All in all, if you own property in France and want to spend time here, it’s better to either stick to the 90-day limit, get a visa for longer visits or make the move to France so that you are genuinely resident here.

People concerned about their situation would be advised to seek independent advice.


Member comments

  1. The article above is helpful but when you write 10 months max time outside France in the link I presume that doesn’t mean 10 months total in 5 years?! It is consecutive? The 183+ rule was what I was aware of but I have not seen this anywhere in black and white and in French relating to withdrawal agreement residency. Can anyone point me in the right direction? Thank you.

  2. I question if it’s necessary to be “full-time” resident, as stated above, to qualify for a CDS. For the “50-50” people, making the French home the primary residence, getting the CDS and spending 183+ days a year in France seems a valid way to go. But yes, logically it would also mean paying taxes in France instead of the UK.

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