What second-home owners need to know about French taxes
Owning property in France is great for all sorts of reasons - but having French assets does mean you may be liable for French taxes.
From property taxes to tax declarations and tax residency, inheritance tax and even wealth tax (which isn't just for the super-rich), here's what you need to know about French taxes if you own property in France.
Property taxes
Most second-home owners will already be aware of property taxes, the annual bills for which arrive in the autumn. All property owners in France pay the owners' tax taxe foncière. The householders' tax - taxe d'habitation - has gradually been phased out and is now only paid by second-home owners.
Local authorities in areas that have a housing shortage are allowed to charge an extra surcharge, up to 60 percent, on taxe d'habitation for second homes. You can find out if you are in a zone tendue (area with a housing shortage) HERE.
The amounts vary according to the local authority rate and the value of your property, but in 2022 the average annual taxe foncière bill was €895, while taxe d'habitation was €772 per year.
READ ALSO How much can you expect to pay in property taxes?
Property tax declaration
A new requirement from 2023 is the property tax declaration - a form that must be filled in by everyone who owns property in France, including those who live in another country.
The declaration is a one-off, so if you filled it out in 2023 then you don't need to do it again unless your circumstances change (ie you sell the property and/or buy a new one).
If you have bought property more recently, or simply didn't realise that you needed to fill in the declaration last year, here is what you need to do.
Income tax declaration
Everyone who lives in France is required to complete the income tax declaration each spring (even if all their income comes from abroad as is the case for many pensioners).
Second-home owners who maintain their tax residency in another country are not required to complete this declaration - unless they have income in France, including any rental income from letting out their property.
While most second-home owners keep their property as a holiday home, it's not uncommon to let it out for a few weeks of every year - often on Airbnb - in order to help cover its costs.
However this gives you an income in France, and means you may be required to complete the tax declaration for overseas residents. Depending on how long you rent out your property for, you may also need to register as a landlord. Similarly some local authorities require you to register with the mairie if you rent out your property on Airbnb, even if it's just for a few weeks.
Find full details HERE.
Tax residency
This brings us to the question of tax residency - which is not the same as 'residency' for immigration purposes.
People who are resident in France need either a long-stay visa or a residency card (unless they are citizens of an EU country). This doesn't apply to second-home owners who (unless they are EU citizens) would either have a short-stay visa or stick to the 90-day-per 180-days limit.
However, tax residency is a different thing and can be conferred automatically based on length of stay.
In general the French regard people who spend more than six months of the year in France as tax residents, although this also depends on your home country's rules - for example the UK says that you must spend at least 183 days of the year in the UK in order to retain British tax residency.
This won't apply to most second-home owners, but those who have a six-month visa and then also use their 90-day entitlement for visits during the rest of the year may find themselves getting close to the limits for tax residency.
Find more information HERE.
Wealth tax
You may think that wealth tax only applies to oligarchs, but those who have a property in one of the more expensive areas of France may also be liable, especially if it is in an area where property values have risen rapidly (such as Paris).
France's wealth tax is applied to residents who have real estate assets (buildings and land) worth €1.3 million or more. This can apply to global assets, depending on length of residency, but for those who do not live in France, only French assets are taken into account.
So if your second-home (or homes) is worth €1.3 million or more, then you may be liable for the higher rate of tax.
This won't apply to many people, but if you own property in Paris, particularly if you bought or inherited it some time ago, you may find that it is now over the €1.3 million threshold, since property prices in the capital have exploded in recent years.
Find full details of the wealth tax, how it is calculated and the exemptions HERE.
Inheritance tax
This is less of a problem for second-home owners themselves but more a potential issue for family members.
France's strict inheritance rules (such as being banned from disinheriting your children) don't apply to people who don't live here - provided you have made a will clearly stating that you wish your estate to be dealt with under the laws of your home country.
However, that doesn't mean that your heirs are not liable for inheritance tax if they are inheriting assets in France.
Find full details on inheritance tax rules and estate planning HERE.
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From property taxes to tax declarations and tax residency, inheritance tax and even wealth tax (which isn't just for the super-rich), here's what you need to know about French taxes if you own property in France.
Property taxes
Most second-home owners will already be aware of property taxes, the annual bills for which arrive in the autumn. All property owners in France pay the owners' tax taxe foncière. The householders' tax - taxe d'habitation - has gradually been phased out and is now only paid by second-home owners.
Local authorities in areas that have a housing shortage are allowed to charge an extra surcharge, up to 60 percent, on taxe d'habitation for second homes. You can find out if you are in a zone tendue (area with a housing shortage) HERE.
The amounts vary according to the local authority rate and the value of your property, but in 2022 the average annual taxe foncière bill was €895, while taxe d'habitation was €772 per year.
READ ALSO How much can you expect to pay in property taxes?
Property tax declaration
A new requirement from 2023 is the property tax declaration - a form that must be filled in by everyone who owns property in France, including those who live in another country.
The declaration is a one-off, so if you filled it out in 2023 then you don't need to do it again unless your circumstances change (ie you sell the property and/or buy a new one).
If you have bought property more recently, or simply didn't realise that you needed to fill in the declaration last year, here is what you need to do.
Income tax declaration
Everyone who lives in France is required to complete the income tax declaration each spring (even if all their income comes from abroad as is the case for many pensioners).
Second-home owners who maintain their tax residency in another country are not required to complete this declaration - unless they have income in France, including any rental income from letting out their property.
While most second-home owners keep their property as a holiday home, it's not uncommon to let it out for a few weeks of every year - often on Airbnb - in order to help cover its costs.
However this gives you an income in France, and means you may be required to complete the tax declaration for overseas residents. Depending on how long you rent out your property for, you may also need to register as a landlord. Similarly some local authorities require you to register with the mairie if you rent out your property on Airbnb, even if it's just for a few weeks.
Find full details HERE.
Tax residency
This brings us to the question of tax residency - which is not the same as 'residency' for immigration purposes.
People who are resident in France need either a long-stay visa or a residency card (unless they are citizens of an EU country). This doesn't apply to second-home owners who (unless they are EU citizens) would either have a short-stay visa or stick to the 90-day-per 180-days limit.
However, tax residency is a different thing and can be conferred automatically based on length of stay.
In general the French regard people who spend more than six months of the year in France as tax residents, although this also depends on your home country's rules - for example the UK says that you must spend at least 183 days of the year in the UK in order to retain British tax residency.
This won't apply to most second-home owners, but those who have a six-month visa and then also use their 90-day entitlement for visits during the rest of the year may find themselves getting close to the limits for tax residency.
Find more information HERE.
Wealth tax
You may think that wealth tax only applies to oligarchs, but those who have a property in one of the more expensive areas of France may also be liable, especially if it is in an area where property values have risen rapidly (such as Paris).
France's wealth tax is applied to residents who have real estate assets (buildings and land) worth €1.3 million or more. This can apply to global assets, depending on length of residency, but for those who do not live in France, only French assets are taken into account.
So if your second-home (or homes) is worth €1.3 million or more, then you may be liable for the higher rate of tax.
This won't apply to many people, but if you own property in Paris, particularly if you bought or inherited it some time ago, you may find that it is now over the €1.3 million threshold, since property prices in the capital have exploded in recent years.
Find full details of the wealth tax, how it is calculated and the exemptions HERE.
Inheritance tax
This is less of a problem for second-home owners themselves but more a potential issue for family members.
France's strict inheritance rules (such as being banned from disinheriting your children) don't apply to people who don't live here - provided you have made a will clearly stating that you wish your estate to be dealt with under the laws of your home country.
However, that doesn't mean that your heirs are not liable for inheritance tax if they are inheriting assets in France.
Find full details on inheritance tax rules and estate planning HERE.
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