Buying

Registration duties (equivalent to Stamp Duty) will apply on your purchase. These are included in the Notaire’s charges (c.4% for new buildings and c.10% for secondhand properties).

Ongoing

There are two annual property taxes:

• Taxe fonciere – the owner of the property is liable for this national tax; and
• Taxe d’habitation - which is paid by the occupier to the local taxing authority.

Rental income is taxable but can be substantially sheltered by the interest cost of borrowings.

France has a wealth tax which applies if your property portfolio exceeds €720,000. It is charged at a progressive rate which starts at 0.55% rising to 1.8% where the property is worth €15m.

If you are tax resident in Ireland then you will normally be taxable on your net French rental income receiving credit for income taxes already paid in France.

Disposal

Capital Gains Tax (CGT) applies on disposal of French property at a rate of 16%. This rate reduces progressively to 0% from year 6 to 16. In other words after 16 years of ownership the CGT liability is Nil. Unlike income taxes the Irish-French Tax Treaty does not provide for relief of overseas CGT paid in France. This means that an Irish tax resident pays CGT in both countries. The Irish rate is currently 20% so the maximum combined liability is 36% reducing to 20% after 16 years.

Inheritance tax law is France is complicated and needs special advice. If you are buying a property in a situation other than husband and wife then you should definitely should seek legal advice.

Arranging your affairs so you minimise your tax liability both now and in the future, particularly with a large investment is very important. Oui Can Do work with Anthony & Cie in France to help you with all your taxation requirements.

Anthony & Cie have a strong team of consultants, tax analysts, financial advisors and wealth managers specializing in real estate transactions, international tax, and tax-efficient investments. They will plan your estate and income using domestic legislation and international tax treaties. John Crawley of Oui Can Do is the Irish Representative of Anthony & Cie.

Contact us today to discuss how we can help make the structuring of your investment as tax efficient as possible both now and in the future.