French Property Taxes
Preparing your residential property investment in France
When choosing to invest in real estate, it is important to clearly define your needs in order to adopt the most appropriate investment plan, and to know the tax implications.
Discover our report to understand and prepare for the key points of real estate investment in France.
Some of the elements you will find in this guide:
- Acquisition / Ownership / Transmission information
- Charges and taxes due on acquisition
- How to structure the acquisition?
- Taxes on rental income
- Property wealth tax
- Sell of property (taxes on capital gains)
- Transfer of property (gift/inheritance tax)
More information on transmission (gift/inheritance)
How is taxed the transfer of a property through gift or inheritance?
- Gift/Inheritance taxes are payable on the market value of the property transferred
- Gift/Inheritance taxes are payable according to the family relationship:
- Direct line gift/inheritance: progressive tax scale with a marginal rate of 45%
- No inheritance tax is due for inheritance between spouses
- Allowance of €100,000 per child and per parent / €31,865 per grandchild and per grandparent
Transfer of bare ownership while retaining usufruct
What are the benefits?
- Lower taxes because they are payable on the value of the bare ownership only (which depends on the age of the usufructuary)
- The usufructuary retains the right to dispose of the property and receive the income
- On the death of the usufructuary, the bare owner receives full ownership without paying any additional tax
What is usufruct?
EXAMPLE
At the age of 63, a parent gives bare ownership of a property worth €2 million. The value of the bare ownership is estimated at 60% of the value of the full ownership; taxes will therefore only be payable on €1.2 million.
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