Buying in France

Hi

Two queries regarding buying an investment property in France.

1. What is the taxation situation on sale

2. Has anyone any experience of France CentreParks (Pierre and Vacances)- there is a new development being promoted by P and V with 4.5% rent

Many thanks

1. What is the taxation situation on sale

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The current DTA between Ireland and france does not cover CGT. So you will be liable to the tax in both countries and you can't offset the tax paid in france against your irish liability. This DTA is currently being negioated.

Don't know what the story is in relation to CGT in France (how much you have to pay) but you will be liable to 20% of the gain on your investment to Irish revenue.

As I understand it the recent Finance Act has unilaterally legislated that credit will be given for CGT paid in France. In other words the maximum you will pay will be the maximum CGT imposed in either country which in this case is the 20% in Ireland. This new legislation ocvers a number of other countries as well. Look it up on the Dept of Finance site.

why cant the revenue make a law that the max tax you pay in any jurisdiction gives you credit towards your tax liability at home ?
I'd like to know what there would be to negotiate with France unless some official wanted a few free junkets there ? If as you say they ended up with the usual rule that the max tax has to be paid wiith a credit for unavoidable tax at source of income with the result that theres no tax saving/avoidance in a foreign deal then what was the big problem about holding negotiations and getting them over quickly ? Or am I missing something ?

sign said:

If as you say they ended up with the usual rule that the max tax has to be paid wiith a credit for unavoidable tax at source of income with the result that theres no tax saving/avoidance in a foreign deal then what was the big problem about holding negotiations and getting them over quickly ? Or am I missing something ?

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Punctuation?

DrMoriarty said:

Punctuation?

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I''ll do a deal. No sentence fragments and I'll add some punctuation marks



Someone please answer my question ..*entering rant mode*

why cant the revenue make a law that the max tax you pay in any jurisdiction gives you credit towards your tax liability at home ?

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They have but have to be agreed by way of DTA

You pay tax according to the rules of the foreign country.

You then calculate tax in Ireland as though the property was an irish property. See [broken link removed] in particular "How are Foreign Rents taxed" You then get a credit for the tax paid in the foreign country.

In the case of france the DTA was negotiated before CGT was introduced in France. The DTA is currently being negotiated but until it is sorted out you pay taxes in both countries.

[broken link removed]

Don't know or have not heard anything about the new legislation from the Dept of Finance.

Pierre n Vacannces would be well rated as a property letting agent in France. They provide accomodation to Travel Agents throughout the
world. I have stayed in some of their accomodation and they are
usually well situated and pretty well managed.

There are loads of different taxes in France-tick all those applicablle!


Taxe fonciere (property tax) is similar to rates and is paid whether you live in the property or not and is paid by the owner. It is split between tax for the building and tax for the land and varies greatly depending on the location. New property is exempt from property tax for the first two years

Taxe habitation (residential tax), is a tax payable by the person living in a property on January 01 each year whether they are the owner or tenant. Therefore if you own and live in a property, you pay for both fonciere and residential tax.

Tax assimilee (sundry tax) is a tax only paid in certain areas, particularly popular holiday resorts, as the local authorities must spend more on amenities and upkeep.

Taxe professionelle (professional tax) is paid if you want to use your property to work from home.

Import sur la fortune (wealth tax): if you assets are worth more than €730,000 on the January 01 and you are not a resident, you pay wealth tax only on your assets in France. If you are a resident, then it’s calculated on your worldwide wealth including all residences. The rates vary from 0.55-1.8%

CAPITAL GAINS TAX

If you are an EU resident, but not a French resident 16.5%
Non EU resident 33.33%
Double taxation agreement with a number of EU countries
Income tax is at 25%

Make sure your accountant is good!