Taxes in France
Brief information about the French taxes
1. Property tax (taxe fonciere) – The annual tax
This tax applies to property owners; it depends on the location, type of property and its area – paid until December 15. Legal entities pay 3% of the total cost of ownership, property controlled by SCI with an annual declaration exempt from this tax.
2. Accommodation tax (taxe d’habitation) – The annual tax
If the property is for Your personal use, You must pay this tax, until November 17 (in some cases, can be extended until December 15). If You rent the property, the tenant pays the tax. If You have purchased a property for investment program (Lease-back) Management Company pays the tax. Exempt from property owners, used for commercial purposes (eg, for a hotel) and the owners of the real estate classified ISHM – monuments of architecture and history.
3. Property tax (impot de solidarite sur la fortune – ISF) – The annual tax
This tax is paid by each individual, whose capital in France (real estate and capital in the bank minus some debts on payments) exceeds 790 000 euro on 1 January this year. Excess amount is taxable at the progressive tariff from 0.55 % to 1.8 %.
4. Tax on profits from the sale (capital gains tax. La “plus value”)
This tax is paid by the difference in price when reselling Your property in France. If You resell real estate, registered to an individual or SCI in the first 5 years after purchase, the tax is 33 % or 16 % if the seller is a resident of the European Community. When selling after 5 years every year the taxable amount reduced by about 10 % after 15 years tenure with its sales tax is not paid. When selling a property, which is a primary residence, the tax will be charged.
5. Inheritance tax
If international agreements do not apply, the French tax law is applicable. Inheritance tax is progressive; it can reach 40 % for highest amounts (in 2009 – more than 1,772,041 €). There is a no-tax minimum amount (€ 156,357 in 2009), subtracted from the share of each child. When passing on the property to a surviving spouse, the tax does not apply.
6. Tax on personal income (L’impôt sur le revenu des personnes physiques IR ou IRPP) – The annual tax
Every year during the period prescribed by the Ministry of the Budget, the tax payer declares his/her total income for the previous year; the first payment must be made before February, 16. This tax can vary depending on the amount of income and, if You have a family, the number of its members. The interest rate varies from 0 to 40%. With those over 75 years old the tax won’t be charged. Individuals residing permanently or temporarily in France are taxed on income earned in its territory. International agreements on bilateral taxation may exempt non-residents from paying income tax; treaty between Russia and France was signed in Paris on 26 November 1996.