Am I dreaming?

[NormanH]

I don't understand what the housing market in the UK has got to do with President Hollande's proposals, which have attracted little comment, but are the point of this thread.

[Russethouse]

Does it matter which country it is in ? The premise put forward was that the new measures would adversly affect the housing market in France, and a comment was made about the Uk housing market on the back of that.

Basically no matter which country a thriving housing market is generally thought to be healthy.AFAIK

[NormanH]

I think the main point was, as I said before

"That is to say that up till now  dividends and rents have been taxed at

lower rates than income from working, and so in order to bring them into

line there will be a similar graded taxation with tax bands as for

income tax of 5,5 %, 14 %, 30 %, 41 % ou 45 %."

There may be a knock on effect on buy to rent,  such as it exists here, but I don't see why this would affect the price of houses which are a main residence.

[Russethouse]

Only if lots of buy to let owners decide to sell which artificially deflates the market for a period......

[NormanH]

Getting back to the point, here is more detail

http://www.lefigaro.fr/impots/2012/09/10/05003-20120910ARTFIG00733-impots-les-classes-moyennes-durement-frappees.php

[Aly]

Looking at taxes on business and employment rights who in their right mind would invest in France. Taxation may offer a short term solution but what happens the year after does he put taxes up again. Where will  the much anticipated growth come from. Spain spent billions on grand projects, yet its riddled with debt.. The rich are leaving, lets not forget the top 1% contribute some 30% of taxes.in france.

[NormanH]

http://lexpansion.lexpress.fr/economie/comment-la-france-attire-les-investissements-etrangers_251408.html

[Aly]

[quote user="NormanH"]http://lexpansion.lexpress.fr/economie/comment-la-france-attire-les-investissements-etrangers_251408.html[/quote]

Interesting article and may be true of Sarkos time but in the last week Revlon have announced closure, Mittal are closing plants and even Peugeot are desperate to relocate

On another note I wonder if these new taxes will impact on Gite owners. Will the rates be applied after the abatements and what of non residents how will they calcualte tax bands or will it continue at a fixed rate

[NormanH]

" what of non residents how will they calcualte tax bands or will it continue at a fixed rate"

A very good question which also struck me, not only on this issue but also on the proposal to charge CSG etc on rents.

 Many non-residents ( I am thinking of second home owners, not people having a Gîte business)  don't declare their taxes in France, since they aren't fiscally resident here and so don't need to.

Yet the calculation of CSG, and these new taxes on the income from property are based on tax returns.

How will the French authorities know what  income they have?

[Aly]

[quote user="NormanH"]" what of non residents how will they calcualte tax bands or will it continue at a fixed rate"

A very good question which also struck me, not only on this issue but also on the proposal to charge CSG etc on rents.

 Many non-residents ( I am thinking of second home owners, not people having a Gîte business)  don't declare their taxes in France, since they aren't fiscally resident here and so don't need to.

Yet the calculation of CSG, and these new taxes on the income from property are based on tax returns.

How will the French authorities know what  income they have?

They cannot know and it would be to complex a formula for all the different nationalities and tax regimes even for French bueracracy. I think it will be a fixed amount

[/quote]

[Pickles]

[quote user="NormanH"]" what of non residents how will they calcualte tax bands or will it continue at a fixed rate"

A very good question which also struck me, not only on this issue but also on the proposal to charge CSG etc on rents.

 Many non-residents ( I am thinking of second home owners, not people having a Gîte business)  don't declare their taxes in France, since they aren't fiscally resident here and so don't need to.

Yet the calculation of CSG, and these new taxes on the income from property are based on tax returns.

How will the French authorities know what  income they have?[/quote]

Sorry, but I must have missed something here. If you are EU-resident but non-resident in France and own a property in France and have no French income, then you have no income tax liability. If you sell the property and make a capital gain, then at present you pay French capital gains tax at 19% (now plus CSG, CRDS and whatever else they decide to throw at us). In the future I presume that they would apply the capital gains tax at the same rate as the basic income tax rate for non-residents, ie 20% (plus etc etc), if the vendor has no other French income.

[Aly]

[quote user="Pickles"][quote user="NormanH"]" what of non residents how will they calcualte tax bands or will it continue at a fixed rate"

A very good question which also struck me, not only on this issue but also on the proposal to charge CSG etc on rents.

 Many non-residents ( I am thinking of second home owners, not people having a Gîte business)  don't declare their taxes in France, since they aren't fiscally resident here and so don't need to.

Yet the calculation of CSG, and these new taxes on the income from property are based on tax returns.

How will the French authorities know what  income they have?[/quote]

Sorry, but I must have missed something here. If you are EU-resident but non-resident in France and own a property in France and have no French income, then you have no income tax liability. If you sell the property and make a capital gain, then at present you pay French capital gains tax at 19% (now plus CSG, CRDS and whatever else they decide to throw at us). In the future I presume that they would apply the capital gains tax at the same rate as the basic income tax rate for non-residents, ie 20% (plus etc etc), if the vendor has no other French income.

[/quote]

That makes sense to me. Lets hope they do not raise the threshold

[NormanH]

Avec l'alignement de la fiscalité du capital sur celle du travail, leurs

dividendes, leurs intérêts, plus-values de cession d'actions ou de

ventes de biens immobiliers seront taxés au barème de l'IR,

c'est-à-dire au taux marginal de 30 %, 41 % et 45 % (quand cette

nouvelle tranche sera créée), selon leurs revenus. Or actuellement, les

plus-values sont imposées à 19 %

But the barème de l'IR takes into account worldwide income for fiscal residents.

That would mean that  he tax  on rents or plus value would depend not only on the amount gained but also on other income.

Will the tax rate for non-residents also take this into account, and how will they know?

Secondly how can the new CSG on rents be calculated if non residents don't make a French tax declaration?

I stress I am only asking, since as a resident I don't know how things work at the moment for non-residents.

[Pickles]

[quote user="NormanH"]Avec l'alignement de la fiscalité du capital sur celle du travail, leurs

dividendes, leurs intérêts, plus-values de cession d'actions ou de

ventes de biens immobiliers seront taxés au barème de l'IR,

c'est-à-dire au taux marginal de 30 %, 41 % et 45 % (quand cette

nouvelle tranche sera créée), selon leurs revenus. Or actuellement, les

plus-values sont imposées à 19 %

But the barème de l'IR takes into account worldwide income for fiscal residents.

That would mean that the tax on rents or plus value would depend not only on the amount gained but also on other income.[/quote]

Ah, I see what you are getting at, but under the double taxation treaty they can only tax income arising in France, and so basically what would happen is that they would apply the base rate for non-residents ie the 20% referred to previously, on net French income. (Incidentally they will currently apply the standard tax bands (as applied to French residents) to non-residents if the person can prove that the amount of tax that they would pay in France if their worldwide income were to be declared in France would be less than the 20% marginal rate).  

[quote user="NormanH"]Will the tax rate for non-residents also take this into account, and how will they know?[/quote]

At present the fixed rate is 20%, and if you want it to be lower, you have to provide proof (in the form of tax returns to other countries etc) that your total worldwide income would attract a lower rate in France.

[quote user="NormanH"]Secondly how can the new CSG on rents be calculated if non residents don't make a French tax declaration?[/quote]

French-sourced rents paid to non-residents are currently taxed in France, so the CSG calculation is straightforward.

[NormanH]

Thanks that clears it up nicely.

[Jako]

France has it's own tax-haven called Monaco. To prevent the entire French population from moving to Monaco this is forbidden by law.

This law only applies to people with the French nationality and not, lets say ehh,  Belgium for instance....[blink]

[Sprogster]

Jako, French nationals are not forbidden from moving to Monaco, it is just that they continue to be taxed by the French Fisc in accordance with an agreement between France and Monaco, as French tax resident. However, this can be circumvented if like Alan Ducasse, France's most famous and richest chef, if you take out Monegasque citizenship.

The main limiting factor preventing people from moving to Monaco are the astronomical property prices with a decent apartment setting you back multi millions.

[woolybanana]

But, if he moves to Belgium first and becomes a Belgian national, then the French fisc cant touch him if he moves to Monaco later, as implied above and in the French press today.

[idun]

But hasn't he said that he wanted dual nationality? So he would still be french if that was the case?

[woolybanana]

Complex, that. He could then theoretically drop his French one or, perhaps sell the company and pay less tax. Not sure.