Taxe d'habitation/fonciere - pension

[Angie]

Can anyone shed light on the reductions given to pensioners in relation to the annual Taxes due?  I recently came across an article on a French finance website (couldn't find it again) that if your retirement income was below a certain amount (think it mentioned a figure of about 11,000 euros per person or 15,000 euros per couple) you received quite a considerable reduction or in some cases, exemption from one (or both?) of these Taxes.  Our joint UK pensions will be below the 15,000 euro amount.  

Because we thought retiring to our house in France full time would not be viable (our Taxes would represent about 20% of our annual UK pension) this possibility is obviously of interest to us.  

If true and we became resident, would we be classed as pensioners in France at their retirement age (is it 62?) or our UK retirement age which unfortunately has now risen to 66!!

Hope you understand what I am trying to say!

[NormanH]

You may be exonerated from the age of 60 from paying the Taxe d'habitation, but it depends on your income

http://www.impots.gouv.fr/portal/dgi/public/popup?typePage=cpr02&espId=1&docOid=documentstandard_2095&temNvlPopUp=false

The level of income is given on a table here

http://www.cfdt-retraites.fr/Exonerations-taxe-habitation-CSG

for a couple it is just over 15,000 €

To prove this you will have to declare your income to the French tax authorities each year, and if the revenu fiscale de réference that they calculate places you under this limit the exoneration should be automatic.

If you are over 65 you may also get 100€ reduction on the taxe foncière.

Both these reductions are of course subject to you making a proper tax declaration in France, so you may have to wait until you have been though a year of the process to see the benefit.

[NormanH]

You may be exonerated from the age of 60 from paying the Taxe d'habitation, but it depends on your income

http://www.impots.gouv.fr/portal/dgi/public/popup?typePage=cpr02&espId=1&docOid=documentstandard_2095&temNvlPopUp=false

The level of income is given on a table here

http://www.cfdt-retraites.fr/Exonerations-taxe-habitation-CSG

for a couple it is just over 15,000 €

To prove this you will have to declare your income to the French tax authorities each year, and if the revenu fiscale de réference that they calculate places you under this limit the exoneration should be automatic.

You are also exonerated from paying the TV license which comes as part of the taxe d'habitation

If you are over 65 you may also get 100€ reduction on the taxe foncière.

Both these reductions are of course subject to you making a proper tax declaration in France, so you may have to wait until you have been though a year of the process to see the benefit.

[Angie]

Thank you so much, this is great.  It makes the possibility of retiring to France sooner rather than later all the more feasible.  We will of course be playing by the book and making a proper tax declaration.  Much appreciated.

[AnOther]

Unfortunately I think Normans response is really applicable to French pensioners and

those who have completed 5 years of legal residency, not newcomers, and therefore a little misleading.

I understand you perfectly but unfortunately you cannot move to France and take advantage of the French retirement age, which incidentally I think you have misunderstood, don't we all wish !

Unlike in UK where retirement is at a fixed age, currently 65 for men and rising to 65 for women, in common with a lot of European countries in France it is a movable target and provided a certain number of qualifying years have been completed you may be able to retire before the nominal age. In France the current official retirement age is already 65 for both men and women (rising to 67) - FRANCE RETIRES AT 62 or GREECE AT 55 make wonderful headlines for the Sun and Daily Mail ! - but given sufficient qualifying years they may be able to retire with a full pension at age 62 at the earliest. Sarko put it up from 60 to 62 but I think possibly M Hollande reversed that, not sure, but it's of no consequence here anyway.

Until you reached UK retirement age then you would be regarded as 'inactif', and even beyond that to your 5 years legal residence, to be legally resident you would need to have sufficient resources so as to not be a burden to the French tax payer, for a couple in 2012 this means an income of at least €15,376.

Practically speaking then the bottom line is that UK pensioners or not and regardless of age if you do not have the required income then yes you can come and live in France but since technically you will not be legally resident you will not be able to claim any sort of means tested state assistance which the sort of discounts and reductions we are talking about are.

This may be the site you saw the information on.

[NormanH]

I don't see any mention of being retired in the conditions for being exonerated from the taxe d'habitation, which are

Pour être exonéré de la taxe d'habitation relative à votre résidence

principale, vous devez, au 1er janvier de l'année, remplir les

conditions suivantes :

être : âgé de plus de 60 ans, non passible de l'impôt de solidarité sur la fortune (ISF) l'année précédente

le montant de votre revenu fiscal de référence de l'année précédente ne doit pas dépasser certaines limites

(2 parts

15 376 euros)

occuper votre logement :

- soit seul ou avec votre conjoint

source : http://www.impots.gouv.fr/portal/dgi/public/popup?typePage=cpr02&espId=1&docOid=documentstandard_2095&temNvlPopUp=false

as quoted above.

[AnOther]

Pensioners were mentioned in your other link Norm however it's not a pivotal point in the thrust of my post which is really about the need to be legally resident in order to claim or benefit from reductions or exemptions.

[NormanH]

And to be legally resident

Séjour durant les 5 premières années

Conditions

Le retraité ou autre inactif doit disposer pour lui et les membres de sa famille :

• d'une assurance maladie-maternité,

• et de ressources suffisantes pour ne pas devenir une charge pour le système d'assistance sociale français.

Le caractère suffisant des ressources est apprécié en tenant compte de la situation de la personne.

Pour déterminer si la personne représente ou non une

charge déraisonnable, l'administration apprécie le montant des aides

sociales (accordées sans contrepartie de cotisations) versées. Elle

examine aussi la nature de ses difficultés et la durée de son séjour en

France.

Montant des ressources

Le montant exigé ne peut pas dépasser :

• si la personne a moins de 65 ans, le montant

  forfaitaire servant au calcul du revenu garanti par le revenu de
  solidarité active (RSA),

• si la personne a plus de 65 ans, le montant de
  l'allocation de solidarité aux personnes âgées
   (Aspa), sauf exception.

http://vosdroits.service-public.fr/particuliers/F12017.xhtml

So  a couple who have an income of more than twice the RSA but less than 15376€ (or a single person who has at least the RSA but less than 10024) can live here legally and if over 60 be exonerated from the taxe d'habitation.

The problem might be with health cover, but that isn't the point of this thread

[KathyF]

The question of health cover occurred to me too, Norman, and I think it is relevant in the context of this thread. If the OP and her husband will be on such a limited income that they would qualify for a reduction in property taxes, but aren't yet in receipt of a UK state pension, the cost of full private health insurance could be prohibitive. Yes, they would qualify for a short-term S1 after giving up work, but unless those couple of years took them to state retirement age, they would still have to find the cost of private health insurance once the S1 expired.

[idun]

I would say that if anyone is asking about keeping such a cost down, then their health care would certainly be a factor once the S1 had run out.

Full health care cover can be very expensive, and some people will not even be able to get it if they have a pre existing condition.

[Sprogster]

Mary, property taxes may be the least of your concerns, as how would you fund private health insurance between your S1 expiring and the UK retirement age when you would qualify for a retiree S1?

Personally I think relying on a reduction in property taxes to afford the move is high risk, as from what I am reading if you are a Brit inactif the situation seems subject to interpretation and French officialdom will usually interprete in their favour!

Hopefully you are also budgeting for exchange rate volatility, as there is no guarantee the £ will hold its recent recovery against the euro and already shows signs of slipping back a bit.

[mint]

Sprogster, as usual, is spot on.

The property taxes reduction only amounts to a few hundred euros at most and I don't really think that it should be "make or break" as other considerations are far more important.

As mentioned, the rate of exchange is critical and if any movement downwards is going to cause problems, then you're probably not in a good position to retire and move to France.

I won't even go into the health issue as that is so big that it could put everything else in the shade. 

[NormanH]

The 'impôts locaux' can be rather more than a few hundred Euros.

In my town the average total is 2160€ made up of 1146€ foncières and 1014€ taxe d'habitation.

We are not alone in this. Here is a table of average local taxes 2011

http://www.capital.fr/finances-perso/dossiers/l-explosion-des-impots-locaux-en-france-ville-par-ville/%28offset%29/40

While I agree (I said it myself after all) that the major expense may be health, (we don't know the OP's circumstances)  it is obvious that a saving of 1000€ on an income of say 12,000€ is an important economy.

I would also second the warning about exchange rates. With the problems in the Eurozone things have been easier for the last few months for people with incomes in sterling, but we have seen it go either way over the years.

I can remember both near parity and around 1.50€ to the pound which makes a difference of 6000€ a year on that same income, assuming the original was £12,000.

[mint]

[quote user="NormanH"]While I agree (I said it myself after all) that the major expense may be health, (we don't know the OP's circumstances)  it is obvious that a saving of 1000€ on an income of say 12,000€ is an important economy.

[/quote]

I don't know how to say this without sounding offensive.  IMHO, if the sum of 1000 or so euros is going to financially embarrass you to any great extent, then clearly you are not in a position to consider retiring to France with or without health care in place and regardless of exchange rate fluctuations.

[NormanH]

Different people  live in different financial worlds.

[mint]

[quote user="NormanH"]Different people  live in different financial worlds.
[/quote]

Of course you know that I don't mean a life of unimagined expat luxury; golf weekly, dinner parties, eating out regularly, holidays to other parts of Europe and back in the UK at least yearly, birthday treats, heating every room in your house all winter, air conditioning in the summer, driving on toll-paying roads, attending concerts whenever you feel like it, and so on [:P]

I do think, however, that 1000 euros constitute a very small margin of safety for all the little contingencies of life.  For example, you fall over and break your spectacles and a couple of teeth and you'd be lucky to be able to get a pair of varifocals and half a denture for a grand [:(].  That's why I said that if a thousand euros is a sum that's going to be the deal breaker, then it's no go.

Another example, your car needs some repairs and you live out in the countryside where keeping a car is essential, how are you going to manage?

However, if the OP has a house to sell in the UK .....for, what, 3, 4, 5 hundred thousand, then none of the stuff about health care or house taxes or mutuelle costs will be of any concern[:D] 

[Quillan]

When I have people stay who are from the UK they often tell me how cheap it is in France. If I have some English stay who live elsewhere in France they tell me how expensive it is. What you spend your money on when you come to France on a holiday and what you spend it on when you live here does not make fr a good comparison as  they are different. This is one of the many reasons I always recommend that if you are thinking of living in France don't burn your bridges (i.e. sell up in the UK) but rent a place for a year here first before you finally make up your mind. One myth for example is Electricity is either the same or cheaper in France. Well it is if you exclude the standing charge which you don't pay in the UK but that can be as much as €777 per year in France.

Moving to health care, and lets forget how your going to get in the system for a moment, the French system only pays around 70% of your costs (excluding long duration illness like diabetes for example where they pay 100% like in the UK) you will need, especially as you get older, a good 'top up' insurance (or Mutual as it is called) which is going to cost about €60 each per month. Of course you can get cheaper, much cheaper, but like all things in life you pay your money and get what your given which may not cover all your expenses.

So in conclusion, as Sweets says, if your thinking about surviving on a UK pension with all the grief and worry about exchange rates and you are going to totally rely on your tax rebates in France and your winter fuel allowance from the UK then really you should not move here. The 'tip' I would give, given the mess the UK is in, is to work on parity when it comes to exchange rates. This means anything over parity is a plus to do with what you want or to save for those out of pocket expenses like car repairs etc.

[suein56]

[quote user="Quillan"] The 'tip' I would give, given the mess the UK is in, is to work on parity when it comes to exchange rates. This means anything over parity is a plus to do with what you want or to save for those out of pocket expenses like car repairs etc.[/quote]

Or, after 3 months in our newly acquired house, paying out 951€ for a replacement hot water tank. Not quite what I expected with a 9 year old house, but there you go. OH managed to fit a new shower/mixer tap himself - like for like to replace the existing broken one - at a cost of 65€ for the tap and a reel of plumbers tape but the chauffe-eau was a tad beyond his capabilities.

It is always the miscellaneous column which upsets the apple-cart.

Sue

[Quillan]

[quote user="suein56"][quote user="Quillan"] The 'tip' I would give, given the mess the UK is in, is to work on parity when it comes to exchange rates. This means anything over parity is a plus to do with what you want or to save for those out of pocket expenses like car repairs etc.[/quote]
Or, after 3 months in our newly acquired house, paying out 951€ for a replacement hot water tank. Not quite what I expected with a 9 year old house, but there you go. OH managed to fit a new shower/mixer tap himself - like for like to replace the existing broken one - at a cost of 65€ for the tap and a reel of plumbers tape but the chauffe-eau was a tad beyond his capabilities.

It is always the miscellaneous column which upsets the apple-cart.

Sue
[/quote]

That raises another excellent point. If you cant do these things yourself prepare to pay out a lot of money for labour. A quick look in my Brico catalog show the biggest (300L) hot water tank comes in at about €400 which gives a massive €551 labour cost. Now I know, as I have had to replace one myself, that it took me three hours of which about an hour was working out how to do it. So, as I said, if you can't do such things be aware that they are going to cost a lot.

[Jo]

Horrible to have to say it but do think of ALL eventualities before you move, I moved here with a very active husband in receipt of a good private pension and will receive his state pension this month, 4 months before our original S1s run out. He has very rarely been ill, but has recently been diagnosed with 2 cancers a real bolt out of the blue for us. The prognosis is good so here's hoping, but DO consider could you afford to stay should something happen to one of you.

[mint]

Jo, best wishes for the recovery of Mr Jo but I don't think it's possible to plan as far ahead as if one of you is going to be ill!

If you did that, you wouldn't move at all, would you?

But it IS essential to take plenty of time to think through some of the points raised here.

I'd repeat that if you are scratching around to work things out to the last penny or centime, then it's best not to make the move. 

[KathyF]

I take your point, Sweets, but the fact remains that if you decide to relocate to another country around retirement age, the question of what would you do if something happened to one of you should at least cross your mind. Manageable if you are comfortably enough off to have choices, but a potential nightmare if you have very little or even no room for manoeuvre financially.

[Jo]

The reason I went into it in such (morbid) detail before we moved sweets, is because OH is 13 years older than me and would leave me for a long time before qualifying for my UK pension. Plan for the worst, hope for the best??

[mint]

Jo, hope for the best, definitely!

So your OH is another one who married a MUCH younger person?  Mine is 18 years older than I am but, you know, sometimes it's a case of never crossing a bridge until you came to it?[:D]

[Jo]

I think it was more a case of the scouts motto, Be Prepared!! (They wouldn't let me in the guides, but my brother was in the scouts!) Thanks for the good wishes!