If you, or your client, is one of the 300,000 Brits who have a home in France, be it a holiday home or main residence, then you need to know the latest requirements or risk a fine, writes Joanne Leach, senior client director for France at Strabens Hall.
Property taxes in France
In France, there are three main taxes on property, IFI, taxe d` habitation and taxe foncière.
When Emmanuel Macron came to power in May 2017 he changed the criteria upon which IFI (wealth tax) was levied, from worldwide assets to property. Alongside this pledge he promised to abolish taxe d’habitation on main residences.
Taxe d’habitation is paid by both owners and tenants based on rental values, not reviewed since the 1970s.
It raises money for local authorities to finance public services such as schools, social services, roads, sanitation, waste collection etc. and brought in approximately €22bn (£19.5bn, €23.3bn) per year. This tax will now be borne by just 20% of households; those with second properties including Britons and other nationalities with holiday homes in France.
New reporting requirements
All owners of residential real estate, including those owners resident outside of France, companies (commonly referred to as an SCI), must submit a declaration online, before the 1 July 2023.
The information requested includes details about who uses the property, how the property is used; is it your main residence, maison secondaire, rented, let free of charge, vacant (furnished or not) and the details of those that reside there.
If it’s a seasonal rental, they ask for the start date of the seasonal rental period and who manages the property.
How to declare
The declaration is made online through the French government website, impots.gouv.fr. You will need your numero fiscal, a 13-digit number which can be found at the top left of your property tax bill. If you haven’t got a numero fiscal you can apply for one via the same website in the section ‘votre espace particulier’ and clicking on the line ‘Vous n’avez pas encore de numéro fiscal?’
The declaration is made in the section ‘mes biens’. Here your property(ies) are listed already. To check the details click on ‘Déclarer’ and complete the information requested. When more information is required a blue dot will appear and ‘Déclaration attendue’ . Once completed and the property declared the blue dot will disappear.
If you’re having difficulties you can contact them by telephone or via secure messaging, by selecting ‘J’ai une question sur le service Biens immobiliers’.
If you have just bought the property it may not show up yet.
Any outer buildings, garages, parking spaces will be listed separately, these can be linked to the property.
Why is the government requesting this information?
The government said that by making these declarations it will help them administer who is obliged to pay taxe d’habitation and who isn’t.
It will also enable them to check that other taxes are being paid correctly; income tax on rental income, wealth tax (IFI) as well as the correct application of the carte de séjour.
During the withdrawal agreement there was a rush to get the necessary documents in place within set time scales. The French government, in order to achieve a quick turnaround and not place too much pressure on the French services, made the procedure relatively simple with few checks and, it is believed that, some Britons were given a carte de séjour incorrectly.
If you obtained a Carte de Séjour as part of the withdrawal agreement, French authorities would expect the Briton to be an habitual resident of France and complete an annual French income tax return on worldwide income. If you live and pay taxes in another country, then even if you only have one property in France, this would likely be deemed your maison secondaire.
What are the penalties?
In case of non-declaration, error, omission or incomplete declaration, a fixed fine of €150 per property is incurred.
If you have a holiday home in France and have been pondering retiring to France, why not make France your home?
There are a great many reasons to become French resident, not least the life-style, but there are a number of tax advantages too. A reduction in wealth tax, capital gains tax benefits on the sale of your main residence and with the latest reform no tax d’habitation on your main residence. Britons have become used to being able to come and go from France, the move can be relatively simple and if done properly can be tax efficient. But take advice before taking any action as if not done properly can be quite the reverse.
This article was written for International Adviser by Joanne Leach, senior client director for France at Strabens Hall.
