Housing tax

[JohnDoeM8]

Hi, I live (property not in my name) and work in UK and I am planning to provide my girlfriend a rental accommodation in France. This will be her main place of residence, currently she is unemployed.

We are planning to have the rent receipt in both our names, but, I will pay the landlord directly, and only me that will be paying.

We will be opening a joint bank account that I will put some funds into, every month.

I will mainly be living in UK, but, visiting her frequently.

I would like to know: if housing tax is applicable in this case; if the rental accommodation can still be in both our names if I am the only one paying, and, any other taxes that would apply to this situation.

Could you advise on the best way to allow me to provide my girlfriend a place to stay and live, ensuring that taxes are to a minimum? As, we aren't really that wealthy, she really needs a place to stay, she has no income, and the taxes seem to be high, when looking at the general tax law, but, we are unsure of how it applies to our case.

Regards

[NormanH]

There are 2 taxes. One is a tex on ownership ands the other on occupancy.

In this case she would only have to pay one of them, the  taxe d'habitation; and only once she has been there on the 1st January, so it isn't a bad idea to move in on the 2nd and get a free year.

Some people don't have to pay even the taxe d'habitation, but for that you have to be able to prove low income, and to do that you need to have filled in a tax form and got the evidence to show.

[Cathar Tours]

I think the first thing you need to consider is how she will have access to the healthcare system. She must either buy insurance cover (will cost a bomb) or work else she may not be able to join the system. Considering exchange rates which may get worse over the coming months and the fact your not wealthy keep in mind to see just a GP will cost you 23 Euros each visit. The taxes will vary depending on what you rent and where, there is no definitive answer but if you rent through an agent they can tell you for the property you are interested in. Long term rental in France tends to be unfurnished. All a landlord has to supply is a bathroom and a kitchen sink but no kitchen units, appliances etc. If I were you I would come to France for a week and have a look around the rental market before making form of commitment.

[suein56]

[quote user="Cathar Tours"]I think the first thing you need to consider is how she will have access to the healthcare system. She must either buy insurance cover (will cost a bomb) or work else she may not be able to join the system. [/quote]

That could be a stumbling block in the longer term but for a short, test period it might well be OK to use the EHIC card.

[quote user="Cathar Tours"]

The taxes will vary depending on what you rent and where, there is no definitive answer but if you rent through an agent they can tell you for the property you are interested in. Long term rental in France tends to be unfurnished.[/quote]

Renting through an agency might be nigh on impossible as neither of you will have any of the necessary history of employment, past rental history, guarantors etc etc, such as French renters are used to providing.

There are ways around this but they are costly, including putting aside the value of a year's rental in a locked notaire's account, whilst paying the monthly rental at the same time.

OH and I did not have any of the necessary paperwork when we arrived so we rented privately from a sympathetic proprietor. Though we had to provide proof that we had a substantial amount of money tucked away. Actually I don't think this was a legally backed demand but we didn't know that when we arrived in 2005.

Sue

[JohnDoeM8]

Hi, thanks for your reply, with regards to the income, there will be none on her behalf, we are planning on to opening a joint account where I will put some money in, monthly, does this still class as income on her behalf?

She is a French citizen, and already has social security and healthcare status, by the way.

While the rental accommodation is in both our names, yet, it is only me that is paying for it, would this be a problem for the landlord?

Also, with regards to declaring, she wouldn't have to declare anything as she doesn't have an income, correct?

How does this affect me, if at all, paying for the rent while mainly living in UK, although, I would frequently be visiting?

[EuroTrash]

As regards benefits, you have to declare everything, not just earned income but also allowances and gifts from family and friends. Also, taxation in France works on a household basis not an individual basis so if you have a joint bank account and a joint rental agreement and are therefore classed as a household, her entitlement to benefits will be calculated on household income so there is less likely to be any reduction on the tax d'habitation.

Landlords don't usually care who signs the agreement as long as that person or one of those persons can show their ability to pay. Normally this means having a permanent French employment contract with an income of at least three times the rent. With only a UK income, it's going to be quite hard to find anywhere that will accept you. Tenants are well protected in France and it's hard for landlords to evict them before the end of the contract. If you don't work in France and you're not legally bound to your partner, how does the landlord know that you'll keep paying the rent for the duration of the agreement if the relationship hits the wall?

[JohnDoeM8]

So, this means she would need to declare the money that's being put into the joint account, if so, does it come under income tax or gift tax?

[Cathar Tours]

You need to read what he said a bit more carefully. It's joint income therefore it does not matter what you put in her bank account.

[EuroTrash]

I didn't mean declare it to the tax people, I meant that she will have to declare it to CAF, the benefits agency, and it will count as income for the purposes of assessing any benefits she might be entitled to, such as housing benefits. I believe that you have to declare income to CAF each quarter, and then at the end of the year it's checked against your tax return.

But you will need to clarify whether you're going to be treated as a household or not because this will make a difference to all kinds of things. You can't claim to be a household when it suits you and not when it doesn't, that's not how it works. As said, income tax is calculated per household. If you're classed as a household, which with a joint rental agreement and a joint bank account I think you would, you will have to declare your joint income each year, and that's when any income tax will be calculated. But the income tax you've already paid in the UK will be offset so there shouldn't be anything further to pay, on earned income at any rate.

This would probably be quite simple to set up in the UK but I suspect it may be more complicated in France because there are more rules and the systems are more joined up.

[EuroTrash]

Cathar Tours, I did read what he said, and if the gf is claiming benefit then I think it will matter quite a lot to CAF how much money is going into a bank account with her name on it.

[JohnDoeM8]

Hi, thank you so much for your detailed explanation.

We don't plan on obtaining benefits, all bills and rent will be paid by myself. The rent will be paid directly to the landlord and the bills will be paid by her, however, through the joint account.

Would the joint income (for France tax agency) be what is being put into the joint account or what my wage is in UK?

Apologies for my ignorance, as you can tell, law is just not my cup of tea.

Once again, thank you very much for your time :)

[Cathar Tours]

[quote user="EuroTrash"]Cathar Tours, I did read what he said, and if the gf is claiming benefit then I think it will matter quite a lot to CAF how much money is going into a bank account with her name on it.[/quote]

 

Not you the OP. I meant he should read what you had written.

 

Surely though the biggest issue is she would be an "inactive" in France therefore it's six months and leave, technically, although I doubt anyone will do anything. That said I can't see if she does not get benefits in the UK and has not contributed to the French system that she will be able to claim any benefits in France.

[EuroTrash]

If it is agreed that France is where you are primarily tax resident then you declare your total worldwide income from whatever source. However, technically you would at most be be dual resident, since presumably you would continue to meet the criteria for UK tax residency as well. So I think you would need to explain the situation to the authorities and get a decision.

Having just read the criteria again, it looks as if it depends how "conjoint" is interpreted. If it doesn't include an unofficial partner, then you would not meet the criteria as far as the tax authorities are concerned. If you have a child together, or get pacs'd or married, then you would.

"Sous réserve des Conventions fiscales internationales, vous êtes considéré comme domicilié fiscalement en France si vous répondez à un seul ou plusieurs de ces critères :

votre foyer (conjoint ou partenaire d'un PACS et enfants) reste en France, même si vous êtes amené, en raison de nécessités professionnelles, à séjourner dans un autre pays temporairement ou pendant la plus grande partie de l'année. A défaut de foyer, le domicile fiscal se définit par votre lieu de séjour principal ;

etc - the other conditions don't apply to you.

[JohnDoeM8]

@Cathar Tours

She's born and raised in France, French ID, French citizen. So, I'm not sure if the "inactive" status applies to her, or, that she would have to leave after six months.

[andyh4]

The income tax situation is quite simple. If you are working in the UK for a UK company or as self employed, you pay tax and NI in the UK. You will have to declare these earnings in France however, if this is your main residence. This is done on a separate tax form for overseas incomes. The double taxation treaty between the UK and France ensures however that such income is not taxed again in France. If however you also have income in France then the tax on the French income will also take account of your UK income.

The key point in this is where you are when you do the work. Provided you do the work while in the UK, that is where you are taxed. If you are physically in France when you do the work then France is where you pay the tax - even if you are doing it for UK customers.

[JohnDoeM8]

I don't plan on working in France and all income will come from UK.

I just want to be able to provide my girlfriend a place to stay and live, so, paying the rent and sending her money for bills.

We are unsure of what needs to be declared and what taxes are applied to us, could you advise?

Many thanks.

[Cathar Tours]

Well it's all variable and not set in stone as it depends on where you live etc.

 

You will, as mentioned, have to pay taxe d’habitation, this depends on your local mayors office and it can vary a lot form one town/village to another.

 

Electricity and Gas - Look at https://particulier.edf.fr/fr/accueil/offres-d-energie.html  and start from there. Electricity prices will depend on size of supply (not like the UK where you get just one size) and the 'plan' you chose. Some towns also have their own generated supply but not that many and their prices may be higher or lower  plus they might not offer the same type of tariffs.

 

Phone, Internet and TV - Using Orange as a guide (there are others and some are cheaper) it's around 40 Euros a month but other than to mobile phones all national and International calls are free. There is a TV licence iv just over 121 Euros a month but it is include in your taxe d’habitation. http://www.orange.fr/portail for prices.

 

Water - Again varies in price due to many places having their own supply. The village next to us pays twice what we pay for example.

 

So in short nobody can give you any idea on actual prices BUT you should be able to ask the agent or landlord for all these costs.

 

That should cover all the taxes etc. you need to pay as she won't be claiming benefits. She sure is a lucky girl, I hope she is worth it (I am sure she is).

[EuroTrash]

Also tenant's insurance, because tenants have to take insurance in France.

And maybe a separate rubbish tax, though that might be included in the taxe d'hab, again it varies from commune to commune - as Cathar Tours said, the landlord should know this (I doubt you'll be using an estate agent because they're sticklers for paperwork that you won't be able to produce).

[pomme]

Don't forget one of the very early points made about health care. An EHIC card may be usable for six months but she will have to make a claim for payment to Newcastle and you won't necessarily get all her outgoings refunded. It only covers After a time they will realise the card isn't being used properly.

See this page for more information including the Living in France section

[JohnDoeM8]

From a bills point of view, she knows everything.

We're just unsure of how the law sees our situation, from a tax point of view.

From what I've been told, she doesn't get charged gift tax, it's me, and under UK's gift tax laws, that's something I'll deal with.

However, if she was to be receiving these "gifts", would she have to declare it as income, thus eligible for income tax?

I mean, even if she does, it won't go above the threshold, so, there isn't a problem there.

With regards to "taxe d'habitation", if she's the only person that makes up the "household", then it's her income that would be accountable, right?

Thank you for your valued time, it is much appreciated.

[Cathar Tours]

I think you are at the point of needing professional help with this. People here (including me) can only give their interpretation of what they think the law may or may not be and none are qualified in these areas. This is a case of spend a little money now on professional help and save a fortune later on. basically next time your in France see an accountant.

[JohnDoeM8]

Thank you so much, for your kind and generous help. I will be sure to take further advice from professionals :)