Brits won’t be considered in Francois Hollande’s new holiday home rent tax
Thousands of Britons currently own a home in France and fear the new taxation which will be put in place by the new French President Francois Hollande. However, this taxation only concerns those who earn significant amounts of money in France. There is no need to worry if you are a British owner who does not actually work in France and your holiday home is let just a few months per year. The impact of the changes both on government revenues and the overseas property market will be “insignificant”, according to Matthieu Cany, director of Sextant Properties. If you aren’t a French resident or if you live in France without a French holiday home rental income, this new tax is irrelevant.
This measure has been decided on the 4th July 2012 in order to tax the better-off and thus reduce France’s large budget deficit. President François Hollande is seeking to put in place French residents and non residents by having a mandatory social contribution tax to holiday home owners who receive a rental income only.
Here are the French tax income rate bands:
|
Salary bracket in France in Euros |
% of taxation your rental income |
|
Up to €5,963 |
0% |
|
From €5,964 to €11,896 |
5.5% |
|
From €11,897 to €26,420 |
14% |
|
From €26,421 to €70,830 |
30% |
|
Beyond €70,831 |
40% |
For example, a person living in the UK that has a rental income in France of €5,000 is in the lower tax band – therefore has to pay 0% in tax.
Then, there are social contributions:
– The CSG (generalized social contribution) at the rate of 8.2%
– The CRDS (debt repayment) at the rate of 0.5%, in addition to the 2% social levy and 0.3% additional contributions.
In total, there is an 11% overall social contribution for any income realised in France. So you will have to pay only €550 of social contribution from the €5,000 rent received.
To learn more about taxes in France, please click here.