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potental profits.


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I'm a first time investor and am currently trawling through all the info i can find on investing in french property.

The one subject i cant figure out is the capital gains tax and taxation in general.

I'm looking at purchasing one or two buy-to-let residential properties with agreed rental returns (any shortfalls will be covered through insurance policies) so hopefully they will pay for themselves.

The idea is that once the children are independant i will sell the properties and use the money raised through the increased values to finally purchase a home in france for myself and my wife to retire to.

However i've read that as a non resident i will be liable to pay upto 50% capital gains tax. Does that mean that if i made say 30k profits from the sales in the future i would have to give half of it over to the tax man?

If anyone could enlighten me i would be very grateful.

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I think you've read wrong.

In general terms, the rate of CGT for both French and non-French (but EU) residents is 16% of the net gain after allowances. If you are French resident you pay an extra 10% in French social charges making the effective rate 26%.  The full tax is due on sale during the first five years, then reduces by 10% each year.  After 15 years there is no liability.

You will find a summary of the French CGT arrangements [url=http://www.sykesanderson.com/articles/french_cgt_rules_2004.asp]HERE[/url]

You will also find a summary of French income tax, which includes your particular situation, [url=http://www.frenchentree.com/france-tax-advice/DisplayArticle.asp?ID=2254]HERE[/url]


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