COMPASS IMMOBILIER: TAXATION Part 3 - Wealth and Property Taxes

WEALTH TAX

This is a tax applicable to assets valued over 790,000 Euros and is called ISF or l’impôt de solidarité sur la fortune. For a non-resident, it is payable on the value of property owned in France; for a resident, it is payable on all assets (unless certain assets come within one of the categories of full or partial exoneration). The tax is payable on a sliding scale as follows:

Between 790,000 Euros and 1,290,000 Euros 0.55%
Between 1,290,000 Euros and 2,530,000 Euros 0.75%
Between 2,530,000 Euros and 3,980,000 Euros 1%
Between 3,980,000 Euros and 7,600,000 Euros 1.3%
Between 7,600,000 Euros and 16,540,000 Euros 1.65%
Above 16,540,000 Euros 1.8%

PROPERTY TAXES

There are two principal types of property tax:

· land tax (taxe foncière)
· occupancy tax (taxe d’habitation)

Both are calculated on the basis of the notional rental value of the property upon the first of January of each year. They are payable annually and the bills come out in the autumn.

Payment of the land tax is usually divided pro rata temporis between vendor and purchaser on the basis of the completion date of the purchase. The purchaser will be responsible for refunding any tax paid for that period directly to the vendor.

The occupancy tax is payable by the occupant of the property on the 1st January of any given year for the entire year. The purchaser, or other occupant, will be responsible for paying it for the year following the purchase and it is not divided in the same way as the land tax. The tax is payable on second homes but no liability arises if they are not furnished. The television licence is now included within this tax.

An estimate of the amount of the two taxes can often be provided at the time of viewing the property or at the first contract stage based upon the vendor’s contribution for the previous year.

Copyright All Rights Reserved Victoria Headdon, Compass Immobilier