Wednesday, August 8, 2012

Tax changes in France to affect foreign homeowners.

France’s new government has announced tax raises, targeting wealthy households, worth 7.2 billion euros.  The new changes will be retroactive and will affect non-resident second home owners in France, as well as French expats who live abroad but still own a property here.

The major changes that will affect foreign homeowners and French expats are:

  • Increase of capital gains tax from 19% to 34.5%. 
  • Increase of Taxation on Rental income from 20% to 35.5%

The tax on rental income is retrospective and will be applied from the 1st of January 2012 while the increase of capital gains tax will take effect from August 2012.

However, if you already live in France and pay your taxes here, nothing changes for you.  Meaning that if you already have rental income from a furnished property (for example, a gite) then you will not be affected by the increase in taxes. 

Also, if your French house is your main residence you will not be affected by the rise on capital gains tax; and remember that after 30 years of owning a house you are not due any capital gains tax neither. 

For more details about taxes in France including some useful Vocabulary you can read my article Tax in France on Hubpages.