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Aly
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The impact on the sale of French property to people investing from outside France is not good for the French Govt. Funds will not come into France and the Govt tax on purchase will not be realised. The money from the sale will not be available to be spent in the local area - a bit like shooting oneself in the foot I think.
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[quote user="powerdesal"]. How the tax situation affects immigrants from UK who reside in France and have a rental income from other French property I have no idea. I imagine that normal tax rules / rates will apply and will not be related to ( original ) Nationality. [/quote]

 

It cannot be.  Firstly it would be against EU law and secondly the French system keeps only limited records of ethnicity or nationality

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[quote user="Aly"]As well as SC applied to capital gain, the tax on rental income for non residents - so presumably gite income as well will also rise from 20 to 35.5%
The tax on rental income will be retrospective from jan and the Capital gains will apply from the end of this month.
This is surely going to have an impact on those non residents seeking to buy property as an investment as well as those seeking to sell

[/quote]

 

Anyone who currently buys property in France as an investment probably needs some form of very severe therapy.

France has never had the UK style boom and bust property hikes until the 2000s.  Many had their fingers burned and many who have recently bought in Paris and the SE coast will almost certainly end up the same way with prices well out of line.

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[quote user="powerdesal"]The impact on the sale of French property to people investing from outside France is not good for the French Govt. Funds will not come into France and the Govt tax on purchase will not be realised. The money from the sale will not be available to be spent in the local area - a bit like shooting oneself in the foot I think.[/quote]

Exactly so. Plus people who rent out might be less inclined to do, so fewer visitors will arrive to spend locally. We don't rent out ourselves, but some in our apartment block do in a small way; a couple of them were saying yesterday that they will stop altogether, as they had been happy to cover TF & Td'H by doing so, but with the suggested new rules it wouldn't be worth bothering.

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I think it will have a huge impact on popular areas where overseas buyers still make up good numbers.

Will they invest with a capital gain tax of 35% and a hike in rental taxes. Its very short sighted and ideology driven.

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The 'point' of this thread seems to be to find something to alarm people with, either residents with ill-researched and ever-changing figures about health care, or now with this Telegraph article about charging CSG on  rents, one which come rather late in the day after the Figaro articles I linked to before.

It is intended to attack the policies of the newly elected French government from the point of view of the Telegraph and the Financial Times, organs which can hardly be said to represent Socialist opinion.

To be clear about the new rules about CSG and rental and sale of second homes.

At present if you are resident in France and let out a second property you declare the rental  as income and it is taken into account for income tax (often but not always under the MicroBic system)

You then pay a second 'social charge' on the income. Those charges are being increased to 15.5 %

This has nothing to do with nationality obviously.

Equally if you sell a second property you pay tax on the Added Value, and social charges on that also.

What is being proposed (but it is by no means certain it will pass internationally) is that non-resident home owners are treated in the same way as resident ones, and pay these charges also.

Where it could fall down is that the so-called 'social charges' are intended to pay off French debt, which it can be argued has nothing to do with non-residents.

The Telegraph article conflates tax and social charges to make it appear that taxes are being increased, when in fact there is a standardisation of what is already the case for residents to include  non-residents.

Personally I prefer to see additional taxes on people who can afford second homes to cuts in benefits to disabled people living on the breadline, but that might not be universally popular as a point of view here [6]

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Do you mean because it appears not to include French second home owners, RH?

If so, I believe that French second-home owners are already on a different and higher tax rate so if I've read some stuff in le Fig correctly, this somewhat brings foreign owners in line with French owners. But my interpretation may be a bit off.

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I repeat it has nothing to do with nationality.

Nor is it a higher tax rate.  It is a combined tax rate and a second social charge which applies to residents at the moment, but which it is proposed to also apply to non-resident owners , French as much as anyone else.

: les non-résidents (c'est-à-dire les personnes n'habitant pas en France

du point de vue fiscal) devront payer des prélèvements sociaux sur

leurs revenus fonciers issus de biens situés en France et sur leurs

plus-values immobilières issues de ventes de ces mêmes biens. Des

prélèvements sociaux qui, depuis le 1er juillet, s'élèvent à 15,5%. Ces

non-résidents payaient déjà de l'impôt sur leurs plus-values immobilières

et leurs revenus fonciers, mais pas de prélèvements sociaux (CSG, CRDS,

notamment). Autre dispositif nouveau: le prélèvement social sur les

stock-options et les attributions gratuites d'actions sera relevé.

"non-residents (that is to say people do not live in France for tax purposes) will have to pay payroll taxes on their rental income from property situated in France and on their capital gains from real estate  sales of such goods.  Payroll taxes, which since July 1, amounted to 15.5%.  These non-residents were already paying tax on their capital gains on property and land income, but not social security contributions (CSG, CRDS, in particular).  Another new device: the social tax on stock options and bonus shares will be increased."

This machine translation uses the phrase 'payroll taxes' to mean the social charges.

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The difference is that non residents do not benefit from the same abatements as residents ie Micro bic schemes.

I think it will be challenged as discriminatory and against free market rules.

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Hi,

     Unwelcome as this move is, I wish that forum members (and the Daily Mail etc)  would stop seeing it as a specific attack on the british gite-owners.  As I have read it, it is ,as you would expect , aimed principally at "rich" french nationals who the socialists see as a prime target.  Many wealthy french people who may own several french properties (and companies) move to Belgium or Switzerland and establish residence to avoid french tax (Belgium has NO capital gains tax!)

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The big problem in extending social security charges to EU non residents, is that they would be discriminated against in that unlike French residents they cannot enjoy social security benefits for which they would be contributing. Also these proposed charges would not qualify for relief under any double tax treaty for non residents, not being a tax.

Apparently the UK government have said they will challenge through EU courts if implemented.

Meanwhile not good at all for values of properties in regions popular with second home owners.
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[quote user="Aly"]Catalpu - Thanks for your contribution and for so perfectly highlighting

my point, True the southern Manche forum of Angloinfo is a little lacking and now we know why. [/quote]

Aly, yes, I remember you now...  [Www]

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[quote user="Sprogster"]The big problem in extending social security charges to EU non residents, is that they would be discriminated against in that unlike French residents they cannot enjoy social security benefits for which they would be contributing. Also these proposed charges would not qualify for relief under any double tax treaty for non residents, not being a tax.

Apparently the UK government have said they will challenge through EU courts if implemented.

Meanwhile not good at all for values of properties in regions popular with second home owners.[/quote]

The social charges have nothing to do with social security or services. Despite the name they are a tax. They were bought in years ago to help with the national debt.

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[quote user="gardengirl "] ...................... We don't rent out ourselves, but some in our apartment block do in a small way; a couple of them were saying yesterday that they will stop altogether, as they had been happy to cover TF & Td'H by doing so, but with the suggested new rules it wouldn't be worth bothering.


[/quote]

Hard to see any logic there. Tax is payable on 40% of the rental income, provided this is less than 15,000 €, so the extra payment will be 6.2% of the rent received.

So they are going stop covering overheads rather than pay 14.6% taxes on the rent instead of the 8% they now pay, because of all the "bother" that would cause them?

That has to win the waffle prize for the week [:D]

 

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[quote user="Sprogster"]Also these proposed charges would not qualify for relief under any double tax treaty for non residents, not being a tax.[/quote]

My understanding of the DTT is that it covers "social charges" such as CRDS and CSG (which are named specifically). Am I wrong?

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CRDS and CSG are called social charges, but don't give any rights.

They are to pay debt as said before.

To repeat as it seems some people didn't read:

At present if you are resident in France and let out a second

property you declare the rental  as income and it is taken into account

for income tax (often but not always under the MicroBic system)

You then pay a second 'social charge' on the income. Those charges are being increased to 15.5 %

This has nothing to do with nationality obviously.

Equally if you sell a second property you pay tax on the Added Value, and social charges on that also.

What is being proposed (but it is by no means certain it will pass internationally) is that non-resident home owners are treated in the same way as resident ones, and pay these charges also.

  • Where

    it could fall down is that the so-called 'social charges' are intended

    to pay off French debt, which it can be argued has nothing to do with

    non-residents.
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[quote user="Russethouse"]Renting must have costs, will these be able to be offset ?

Even if this goes through I can't think it will profit the French exchequer much, my guess there will be lots of ways round it.......[/quote]

If you are non resident your min paymant was 20% tax for rented property now as of Jan it will be 35.5%.  Its diffrent for residents as you have mico bic type schemes etc.I am not sure it will be easy to avoid, the PM says that they will go to war against tax dogers or frauisters. This is a super nanny state after all. .

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Unless I am missing something the major deterrent factor with the proposals for non resident owners is that they will not be able to get double tax relief, as the additional charges will not qualify as tax under double tax agreements.

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[quote user="Aly"]
PM says that they will go to war against tax dogers or frauisters. This is a super nanny state after all. .
[/quote]

Does that include all the french artisans who trouser a considerable sum by working on the black? There are considerable more people who don't declare the correct amount of earnings than are non-resident second home owners. Or will the artisans start bleating that he's picking on them when he should be screwing the "rich"

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