Moving to France

[Kim]

Hello, I am doing research at the moment into moving to France.  Myself and my Husband are looking at the region of Aquitaine in the South West.  The more I look on the net and on Forums about the Tax, the more it scares me.  I understand there are 2 main taxes which are paid yearly when owning a property.  Tax Foncieres and Tax Habitation.

We are looking at 5/6 Bedroom property around £300,000 Euros.  Can anyone help by giving us some indication to the % of tax with this value?  Also, we would like to start running a Bed & B Business.  Do we need to declare this?

What other taxes would we need to consider as I noticed on this Forum a hidden Tax which no one seemed to know about for renovation.  On one site there was a Euros 3,500 charge for just running a business from your home with no Income Tax or Government Tax included.  Seems to me there are so many taxes in France in just having a House, it makes me wonder how people manage there. 

Any advise would be very much appreciated. 

Thank you, Kim

 

 

[Mark]

Hi Kim, I'm certainly no expert as I've still got another month to go living in England, but generally speaking I don't think taxe d'Hab and Fonciere are cumulatively any more expensive than Council Tax, and indeed seem to cost less.  Of course, you should check the rates before you buy somewhere though as the variance from house to house seems to be huge.  They'll get you on the cotisations though! 

Try the B&B forum for the rules and regs governing chambre d'hote.  They'll try and scare you with stories about guests from hell but just ignore that and you'll find the answers to all the questions you could possibly think of. [;-)]

[alnmike]

Kim - as Mark said, often the 2 taxes are about the same as UK Council tax. But . . . you may have to pay extra for refuse collection - each departement in France seems to have different rules. After renovations the taxes may increase as your property is now improved - bit like the old 'rateable value' being linked to potential rental income.

Another consideration is utility charges - we have been in owners in France for 2 years and the fuel bills (especially wood and electricity) are much higher than in the UK.

Do a search on Taxe Locale D'Equipement as another chain which might be of interest.

BUT - it is great fun, the people we have met are now firm friends and I hate the time we are not in France, and have butterflies today as we are going on Monday. It may not be as 'cheap' as some hoped, but I feel it is good value for money!! [:D]

[Will]

The thing about local taxes is that they vary so much. Most people find they pay less, many considerably less, than the equivalent tax in Britain. But of course it is all swings and roundabouts. Heating, electricity etc will probably cost a bit more. There is also that once-off tax levied on certain renovations and improvments. And don't overlook capital gains and inheritance taxes, which may only apply if you have to move or one of you dies, but they can be a very nasty surprise just when you don't need one.

Income tax is about the same in France and Britain, though it is difficult to give a proper comparison as the systems are different.

Once you have a business that is being run to give you an income, and a B&B is likely to count as such if it forms your main earned income, then the French social security charges - the dreaded 'cotisations' - really do mount up. Nobody should object to the 8% or so that goes to the health service, but that's just the start. There are further contributions to vieilesse (retirement), CAF (family allowances), chomage (unemployment), plus other funds like training and the 11% or so surcharge which goes towards paying the national debt. All are compulsory for most people, whether or not you are ever likely to benefit from them yourself. In the first year, these charges can cost you 3500€ or so, based on an estimate of an 'average' income, regardless of whether you have any income to pay them (an accountant will tell you how you can opt to pay reduced amounts, but do be careful and do take professional advice on this). Our accountant reckons that 46% of what comes in goes straight out again on these social charges - the first years' estimates will be balanced out in future years, as you start to have 'real' figures so percentages start to apply.

So France is a wonderful place to retire to, but somewhat less attractive if you want to earn a living, legally. No wonder nearly everybody is working on the black market, to varying degrees.

[Kim]

Thank you so much for the replies on all your advice.  I'm learning a great deal from this and appreciate all the valuable feedback. Best Regards

Kim