Tax information

Read our brief guide on tax issues related to buying a house in France.
Agence Fraxinoise gives no guarantees regarding the following information.
Buyers and Sellers are encouraged to seek specialist tax advice to ensure a trouble-free buying experience.

Many non-French buyers make the mistake of thinking that the French system of taxation must be similar to that of the their home country. This is not the case and failure to get proper advice can become a costly mistake.
Its also worth noting that French taxes and Social Security contributions can be much higher than in the UK and other European countries. Any temporary or permant move to France should only be taken after careful consideration of all these issues.

If resident in France for tax purposes, you are liable to pay tax on your worldwide income whether or not it is taken into France. It is your responsibility to make yourself known to the French tax authorities and to fully declare your income, capital gains and wealth.
Unlike in the UK, where the tax year generally runs from April to April, the French tax year is the actual calendar year and residents pay taxes on their income for the preceding year and not the current one.

Generally speaking, you are considered a tax resident from the day after your arrival if you land in France with an intention to live there indefinitely.
You will also be deemed to be tax resident if:

• your main residence (your home) is in France.
• you spend more than 182 days in a calendar year in France.
• you spend more time in France than anywhere else.
• your main activity is in France or if France is where the bulk of your assets are.

Only income received after the date of arrival is liable to French income tax.

Families in France benefit from a system known as "Le quotient Familial" (family quota) through which a taxable income is divided into "units" reflecting the family status of the tax-payer. For example, people living alone (single, widowed etc) represent one unit and are taxed on the whole of their income. A married couple are considered as two units and their joint income will be divided by two. In addition, the first two children count as one-half a unit each and each additional child is counted as a full unit.

It is important that your lifestyle is compatible with your declared wealth and income otherwise the French tax authorities have the right to assess you for tax based upon their interpretation of your apparent wealth and lifestyle.

It is very important to take advice from an experienced tax adviser when dealing with French tax matters, If possible, choose one who is both familiar with expatriate issues and with the local tax office.
There is a considerable degree of inconsistency between the approach taken in respect of taxation of expatriates due to the autonomy enjoyed by the various regional tax offices in France. A local professional tax adviser will be familiar with the attitude of his local tax office.

If you have a pension there are tax issues to consider. If you are a French resident you are liable to declare all of your worldwide income, including your pension and to pay tax in France. If you have already payed UK tax on your pension, it is essential to get the proper advice on how to reclaim it.

Residents are liable to wealth tax on their worldwide assets including all residences. The tax is based on the wealth of the household, including spouse and infant children. Again, this is a complex area and the law changes relatively frequently.

The full range of taxes and their implications in France are too great to go into detail here. Buyers should consult an expert adviser well before making a move, the tax savings are likely to heavily outweigh the cost!