Sarkozy's law for main residence owner in France

[makeiteasy]

Sarkozy's law for main residence owner has been voted on 12th july and would take effect from this date . It should allow to tax residents in France to deduct 20% of their mortgage interest for their main residence ONLY on a maximum of 5 years with a cap at 7500 euros interest for a couple(+500 euros per child) or 3750 euros interest for a single per annum.The amount saved(ie maximum 20% of 7500 € = 1500 euros for a couple)  will be deducted from the tax amount to pay or will be refund by cheque for the non taxable people.

This law should be available for mortgages which have started from the 12th july 2002.Confirmation of amounts and date would follow within the next weeks as they are still not clearly specified by the government.I will keep you up to date.[;-)]

 

[makeiteasy]

As promised, here is the latest update: the "Conseil Constitutionnel" has refused to take into account mortgage for main residence before the 6th may(date of Mr Sarkozy's election)for tax resident in France.Christine Lagarde, Secretary of Economy, has declared today that only for the first year the amount of interest to deduct will be 40% of the mortgage interest instead of 20% but still capped at 3750 € for a single and 7500 € for a couple(+500€ per child)).Then for the next 4 years it will be 20%.[I]

 

[Crevette]

Thanks for the update. It will be interesting to see the efect on the market.

-Rob-

[woody2122]

does this law mean that i will pay less tax foncere and dahabitation or will i receive a cheque from the bank, can someone simplify this sarkozy law for me please

[Sunday Driver]

The new law allows you to offset mortgage interest against your income tax. You obtain the relief by way of a reduction in your income tax.  If you are below the threshold for income tax, then you obtain the relief by way of a cheque from the tax office.

It will have no effect on the tax d'habitation and tax fonciere which you will continue to pay as you do now.

 

[Busy Bee]

Does that mean if you took out your mortgage before 6th May, you are not eligible for tax relief?

[Crevette]

Interesting that there is some news about the government debating having a "minimum level of taxation" today... with all the "tax credit" schemes going, it seems that there are an increasing number of people who avoid paying tax altogether, despite good incomes.

Apparantly a similar scheme already exists in the USA.

-Rob-

[makeiteasy]

Yes Tracyk, if you took out your mortgage before 6th may you are not eligible due to the "conseil constitutionnel" decision.[:'(]

[Busy Bee]

Thanks Celine, shame that, we only missed out by a few months!  Maybe next time.

[Crevette]

I suspect that a good majority of Brit buyers are non French tax residents (buying second homes) and so won't benefit from this.

-Rob-

[Busy Bee]

However it would be a shame if those of us who have lived here for years, payed our taxes and charges, got married here, whose children were born here, were not allowed to benefit just because we are 'foreign'.  As for all the proposed healthcare charges for the early retirees - ie those who can afford to retire early, whilst keeping their savings, investments etc in the UK, why should they benefit from the steep charges I and all the other french earners have to pay.

Sorry if that sounds harsh but I have just come back from another meeting with the CAF who after 6 months have still not managed to officially translate my refusal of UK child benefit so they can reinstate my french allocations (and I only applied because they said I had to, not by choice)!

[makeiteasy]

Tracyk,

nothing to do with the fact that you are "foreign".French and all nationalities who have bought their main residence before 6th may 2007 and are tax resident in France are not eligible as well...[:$]