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How much tax and social security on unfurnished apartment rental?


Andy72
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Hello all,

If I were to build up a substantial property portfolio in France and receive 100k Euro yearly in rent, what would my approximate tax and social security outlay be? This would be my only worldwide income

I have tried to use the online calculators I have found but have not been able to figure out how to use them correctly when the only income is rental income

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I’m pretty sure that the reason why you haven’t been inundated with replies is that your situation isn’t exactly a run-of-the-mill scenario!

However, it rather intrigued me and since it’s a bit rainy and miserable today, I just spent an hour looking in to it.

I made the assumption that there are 2 adults in your household, but no children who would be living with you.  I also assumed that there would be no borrowings against the property portfolio: if however there were, I’m pretty sure that (as with most tax regimes) these could be wholly or partly set against the gross revenues.

Anyway, on the tax simulator you get a liability of €18012 tax and €17200 social charges, a total of €35012.  The box is 4BA Revenus Fonciers.   Obviously this is based on the 2021 simulator for 2020 earnings.

One other thing to look out for is the so-called ‘Wealth Tax’ (Impot sur La Fortune Immobiliere).  With that sort of rental income, you’d be talking about a portfolio worth in the region of €1m.  At that level, it would seem that you’re in for another €5k.

I’d be more than happy to be corrected on any of the above.  What I would say though is that your intended situation is one which requires professional advice.

 

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1 hour ago, Gardian said:

I’d be more than happy to be corrected on any of the above.  What I would say though is that your intended situation is one which requires professional advice.

I couldn't agree more Gardian!

Bearing in mind I am a qualified accountant still in part-time practise.

I would also comment from my own investigation into the potential of buying and letting residential property in France some years back, it was not a very attractive proposition. French law much favours the tenant.

Commercial property might well be a better proposition.

 

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41 minutes ago, Gluestick said:

I couldn't agree more Gardian!

Bearing in mind I am a qualified accountant still in part-time practise.

I would also comment from my own investigation into the potential of buying and letting residential property in France some years back, it was not a very attractive proposition. French law much favours the tenant.

Commercial property might well be a better proposition.

 

That depends very much on the location. Rural commercial properties generally do not attract high rents.

We bought our current house, which includes a shop of about 75 m2, in 2010. It is quite neat and modern, with two display windows, and frontage on a main road of 6.5 metres. It sold fishing and hunting equipment and clothing, and had been closed down for a couple of years, following the retirement of the previous owners. We hoped to rent it out at a reasonable price to supplement our income.

When we advertised it for rent we received several offers, but well below what we expected. There were probably at least a dozen empty shops in the town at the time. More have closed down since then, and a Carrefour Market opened almost opposite us 3 years ago, together with new small shops for rent around it.

Our shop is connected to the same electricity supply as the house, and the cost of separating them would not be covered by the rent offered, after taxes, for more years than we could accept. So I bricked off part of it as an office, another part became a utility room, and we use the rest for storage.

Edited by ssomon
punctuation.
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Always remember with property investment the hallowed words of Conrad Hilton:

Location, Location and Location.

If anyone is considering investing in property for rental, then Hilton's words are truer than ever, today.

 

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