INFORMATION concerning the TAX SITUATION for NON-RESIDENTS owning furnished rental properties in FRANCE
As a non-resident, owner of a furnished rental property in France, you will be required to have a tax address in France. This can be acquired through an accountant in France, (fees paid for first year by Pierre & Vacances) who will also manage your VAT statements and tax returns.
Your rental income will be subject to 25% tax by French Tax Authorities. Depending on the country of residence, there exists or not a Tax Convention with France, thus avoiding a double taxation of revenues.
In order to decrease or cancel taxable revenue declared from your property, you are allowed to deduct interest on your mortgage (only if the mortgage is contracted through a bank in France) and you may also amortise the price of the apartment and furniture and fittings.
Amortisation as follows: The Tax Authorities will consider about 15% to 20% of the price to represent the price of land, which cannot be amortised. If you take 80% of price of apartment, you can then apply either 5% per annum over 20 years or 4% per annum over 25 years as amortisation of the property.
Furniture and fittings can be amortised at 10% per annum over 10 years. The amortisation is considered as being deferrable, which means that for so long as you have sufficient interest and other charges to deduct, you do not require using it.
Notary fees may also be deducted over the first 3 years. Rates, which are payable annually, can also be deducted. One journey there and back from your home to your holiday property can also be deducted, (based on the official French Tax Authorities tariff). Accountants’ fees are also deductible. (About u270 per year) Rental income can thus be considerably decreased or even cancelled out completely by the off-setting costs rendering your income net of tax over a long period.
However, a negative balance cannot be stocked to off-set income in coming years.
Please Note: These particulars do not form part of any contract and are for guidance only. All purchases are made under French law. Maps and plans are not drawn to scale and measurements are approximate. Intending purchasers are advised to appoint their own French lawyer and tax adviser.
