French taxes : Registration fees or notary fees

The total fees and taxes payable will depend on the type of property you purchase

In the case of the purchase of an old property, the total transfer of ownership costs and taxes payable for the purchase of an existing property is between 7% and 10% of the purchase price, excluding real estate agency fees. The amount of registration fees included is 5.80% of the purchase price and in some departments 5.09%.

In the case of the purchase of a property on plan or a property less than 5 years old by a professional, you will pay about 2% to 3% transfer fees and registration fees, plus VAT at the rate of 20% (in principle) on the purchase price, excluding real estate agency fees. The amount of registration fees included is 0.7% of the purchase price.

These fees and taxes are payable at the time of acquisition to the notary in charge of the sale.

Although these fees and taxes are often referred to as “notary fees”, in fact, the actual notary fees (emoluments) are only about 1%. The rest is made up of registration fees and disbursements.

French taxes : Income Taxes

Even if you are a non-resident tax payer, if you receive income from a French source, such as rent, for example, you must declare this income and file a tax return in France. There is no reporting threshold, any income must be reported even if it is not taxable.

To determine your tax liability, the French tax authorities will first determine your total income, called your total gross income. They will then make certain adjustments to obtain your net taxable income, called taxable income. Your french taxes liability will then be calculated gradually, depending on the composition of your household and the level of your income.Non-residents are subject to a flat rate of 20% or 30% on net taxable income in France.The declaration is made from April and the tax notice is received at the end of the summer of the current year.

Local taxes

If you own a property in France, you will be subject to two different local french taxes: the housing tax and the property tax

The property tax

This tax is due each year by the owners of a built or unbuilt property (dwellings, industrial and commercial premises, land etc…). The property tax is calculated by the tax authorities in relation to the national “cadastral” rental value of te property and the rate determined by the local authorities. 

Residence tax 

This tax only concerns secondary residences and is due by the owners or usufructuaries. This tax is calculated directly by the tax authorities in relation to the location of the occupant on 1st January of the tax year. The amount due is calculated by multiplying the net rental value of the real property by the tax rate determined by the regional authorities. 

French taxes : Tax on real estate wealth (IFI)

If you do not live in France, only real estate located in France is taken into account, subject to the provisions of any tax treaty between your country of origin and France. The IFI is an annual tax, and the applicable date for asset valuation and household determination is January 1 of each year. The taxable assets under the IFI are all real estate and investments in real estate.

More specifically, they understand:

• The main residence, as well as second homes, land and rental buildings;
• Shares held in real estate partnerships (SCIs);
• Shares held in real estate funds, such as SCPIs
• Shares held in companies up to the value of their assets, in which you hold at least 10% of the share capital.
• Debts are deductible, provided they existed on January 1 of the tax year, are borne by the owner and relate to taxable property.

You are liable for this tax if the net value of your property in France exceeds 1,300,000 euros. The tax rate varies between 0.50% and 1.50% of the declared value of the goods.

It is up to you to decide whether or not to declare your assets to the IFI. However, if the tax authorities decide that you are subject to wealth tax, they have the right to collect the arrears with penalties over the previous ten years. The tax return date is normally the end of May or beginning of June of each year.