Tax on income from long term lets.

[Simon]

Hi,

Could anyone point me in the right direction regards to paying tax in France on income from long term lets of property in France?

A French neighbour told me that there is a flat rate of 11% on this sort of income, however I've returned home now and I wasn't able to quiz him further on this. I would be delighted if this were true!

I live and pay income tax in Scotland.

Thanks

[NormanH]

There are two potential 'taxes' on this.

1) Income tax at whatever band the income falls into

2) Social charges http://vosdroits.service-public.fr/particuliers/F2329.xhtml#N10086

Both of these depend on your individual status and residence.

[Aly]

I believe If you’re a non-resident you’ll pay tax at the basic rate of 20% on the net income generated in France.

If you are resident in France, then any rental income is added to the rest of your income and is taxed on a progressive scale,

Also If you are resident in the UK, you will be liable to pay UK income tax on any income generated in France

but the double taxation treaty between the UK and France, which deducts any French tax paid against the UK tax liability.

I think social charges are now added to this regardless of resident status?

[Pickles]

As stated above, as a non-resident you pay tax at a rate of 20% on the profits (unless you can prove that if your whole worldwide income were subject to French tax, the resultant rate would be less than 20%). This tax can be offset against the UK income tax liability. For your UK tax return you should use the exchange rates on the dates of receipt of income and of payment of outgoings.

You will also be subject to social charges at 15.5% which cannot be offset against UK tax. There is a case at EU level regarding this charge but don't hold your breath for an early resolution.

The levels of allowances before tax depend primarily on whether the property is residential or commercial, and if residential, whether it is let furnished or unfurnished. For certain types, if your income is less than 15K€, the micro-foncier regime may work well for you in terms of income.

[Simon]

Many thanks for the replies.

As I suspected, 11% was too good to be true, perhaps this is his only income and the tax rate starts at 11%? 

I'll look into the micro-foncier regime, and read the above link also.

Can anyone recommend someone who specializes or advises on French income tax?

Thanks

[Kaylee]

My husband and I will be moving to Fr. this year from the US, in looking at properties many have gites which would of course be short term rental income - can someone tell me if the rate of 20% is for this as well. Also what are you allowed to deduct against the income? Such as repairs, maintenance, upkeep etc.?

Thanks,

[idun]

http://www.ambafrance-uk.org/Revenus-provenant-de-la-location-dAs I said on a recent thread, between the service public. fr web site and the french embassy most of this information is available.

And this is the link to the french embassy in London

http://www.ambafrance-uk.org/Revenus-provenant-de-la-location-d

Looks like most of the answers are there.