Our aim being to bring you fiscal and patrimonial solutions according to your situation, we have chosen qualified professionals in order to do so together.
- Tax cuts within the context of laws by De Robien, Malraux, ancient monuments...
- Increase of your patrimony by reduction of the wealth tax.
- Complementary income without tax.
- Easy handing down of your patrimony thanks to simple but efficient fiscal operations.
The tax system of property investment income.
What you must know before acquiring a luxurious property on the French Riviera.
It is very difficult, especially for foreign investors, to cope with the French tax system.
Here are the most important points:
The financing of your property on the French Riviera
Even if you don't need it, it could be to your advantage to apply for a loan to buy your property. In this case, a loan allows you to deduct loan interest from your rental incomes. To date, there are two types of credit:
Redeemable credit:
A long term credit with a fixed or variable rate guaranteed by mortgage or another sort of guarantee. As the credit repayments progress, the deductible interests decrease.
"In fine" credit:
Far more advantageous as regards tax exemption and family protection, the "In fine" credit allows the repayment of loan interest only, thus erasing rental income and building up the capital again on a life insurance contract to settle the loan.
So, during the financing, the property is not included in the wealth tax and in case of death during the loan, the borrowed amount is paid off by the insurance linked to the loan and the invested capital is passed on. Inheritance tax excluded, to the nominated beneficiaries.
Unfurnished rented accommodation:
It concerns new or old accommodation generating rents. They may be held directly or by non-trading properties. If they are worth less than 15,000 €, their incomes receive a 40% allowance; it's called "Micro Foncier". If this limit is exceeded, the effective taxation system will be applied.
Furnished rented accommodation:
Concerns furnished properties allowing temporary or permanent tenancy.
The administrative services distinguish two status:
The “non-professional owner of furnished accommodation” for any natural person or legal entity generating a turnover of less than 23 000 €
The “Professional owner of furnished accommodation” for any natural person or legal entity generating a turnover of 23 000 € or more.
In both cases, this status enables the deduction of the total amount of operating costs (property tax, tax on businesses, maintenance, management … from income tax and to write off the building cost and its furniture. These redemptions can be deducted from the net incomes and deferred with no time limit. Thus, the patrimony built up thanks to an appropriate financing, can generate incomes over a period of thirty or more years without tax and supplementary social security contribution.
Other benefits linked with the “Professional owner of furnished accommodation” status enable, under certain conditions, to avoid the wealth tax and to exempt capital gains from tax when transferred after five years.
For property intended for unfurnished rented accommodation, the capital gains will be exempted from tax after a period of fifteen years.
Finally, thanks to the establishment of non-trading companies submitted to a policy of fiscal openness, you can hand down your patrimony at a lower cost.
All of these measures apply to French residents as well as non-residents. |
