Tag Archives: tax

French stamp duty increased by 0.71%

French stamp duty increase March 2014Buying a property in France? Then it’s worth being aware that French stamp duty, or taxe de publicité foncière, increased by almost 1% on 1 March. Find out more about the change and which regions have opted out.

The increase of 0.71% is applied to the sale price of all completed purchases (actes authentiques) that take place from 1 March 2014. The rise only affects properties built at least five years ago (a lower rate applies to newer properties, which hasn’t been changed).

A temporary rise?

The extra money generated from the increase will be going to local councils, forming an important part of their budgets and compensating for reduced government grants.

It’s expected to be a temporary rise until at least February 2016, however it could be made permanent.

How stamp duty is calculated in France

When buying a property in France, the total cost owed is based on the purchase price and includes tax (national and local), costs and notary fees.

The amount owed in tax and fees is applied on a sliding scale with the more expensive properties paying a lower percentage.

For example, if you buy a property that costs €90,000 you pay 9.07% of the price in tax and fees (approximately €8,170). A €450,000 property attracts a bill of €33,000 (7.33%).

Stamp duty changes from 1 March

This table provides a rough estimate of the frais de notaire that you could expect to pay when buying a French property (source: Barème Langloÿs).

sale price Fee Stamp duty Percentage
€60,000 €2,250 €3,840 10.15%
€90,000 €2,530 €5,640 9.07%
€120,000 €2,800 €7,340 8.52%
€150,000 €3,080 €9,220 8.20%
€230,000 €3,820 €14,000 7.74%
€300,000 €4,470 €18,180 7.55%
€380,000 €5,210 €22,960 7.41%
€450,000 €5,860 €27,140 7.33%
€600,000 €7,240 €36,090 7.22%

Not a nationwide increase

Some regions of France have decided not to apply the increase:

  • Côte d’Or
  • Isère
  • Mayenne
  • Morbihan
  • Paris
  • Val d’Oise
  • Vienne
  • Yvelines

What to do?

If you’re buying a new property, contact your appointed notary (notaire) for the exact amount you’ll owe.

Published: 28 April 2014

France: changes to Chambre d’Hôte regulations

Regulations for B&Bs in FranceRunning a B&B in France? The French government has recently redefined what they class as a chambre d’hôte (bed and breakfast) under the Chambre d’Hôte regulations. Depending on how you run your B&B, it may mean that you need to apply for hotel status.

What is a ‘chambre d’hôte’?

You need to comply with the regulations if your lodging:

  • Is a B&B in France, i.e. providing overnight accommodation plus breakfast
  • Is in your own home, i.e. the house you live in – your permanent residence (this is the recent change)
  • Has no more than five bedrooms for 15 people

If you’re running a B&B that’s not in your own home and/or has more than five bedrooms for 15 people, you’ll need to apply for hotel status instead.

How to comply with the regulations

Changes to Chambre d'Hôte regulations

Here’s what you need to do if you run a chambre d’hôte:

  • Provide at least three services, e.g. breakfast, cleaning, linen changing and reception
  • Each bedroom must have direct or indirect access to a bathroom and toilet
  • Bedrooms and bathrooms must be cleaned on a daily basis
  • Prices for your B&B must be displayed outside the building, in the reception area and in each room.
  • You need to conform with safety and hygiene regulations – your local chamber of commerce can give you details about what these are
  • You must have adequate building and household insurance

How to register your French B&B

First of all, inform your town council (mairie) about your chambre d’hôte business. Who you need to register with depends on how you run your business:

  • If your B&B is your main business activity, you must register with the Registre du Commerce y des Sociétés (RCS) – you can do this via your local chamber of commerce
  • If it’s an additional business to one already registered with the RCS, you don’t need to register your chambre d’hôte
  • If you run your business on a self-employed basis, you need to register with the URSAFF social security agency

Social security and tax payments

If you’re registered as self-employed you must pay 12.2% of your turnover in tax.

If you’re not self-employed the rate you pay depends on your turnover (2014 figures):

  • Under €4,881: you don’t need to register or pay social security payments, although you must pay CSG/CRDS social tax at 15.5% on your net income.
  • Over €4,881: you pay 46% of your net income. But if you’re registered as a small company (micro entreprise) then you qualify for a fixed cost allowance of 71%, so in practice you don’t need to make social security payments until your turnover reaches €16,831.

Do I need to pay VAT?

If your annual turnover is less than €82,200 you have no VAT obligations. If it’s higher then you’re liable for 10% VAT as long as you provide at least three services listed above in the Chambre d’Hôte regulations.

What about local business rates?

Whether there are any other business rates to pay depends on your local council – contact them to find out.

Additional rates may include:

  • Business rates (most councils don’t charge them for chambres d’hôtes)
  • Taxe d’habitation (not all councils charge this)

Please note: this information is intended as a guide only and should not be used to take fiscal decisions. We strongly recommend consulting an expert for advice that’s best suited to your chambre d’hôte lodging.

Published: 26 March 2014

French stamp duty rise for January 2014

Property Stamp Duty UK

Planning on buying a property in France? If you can, buy before the end of this year to avoid the stamp duty rise of almost 15%.

This summer the French government announced that on 1 January 2014 the stamp duty rate (droits de mutation) will increase from the current 5.09% to 5.80%. The increase is said to ‘plug a financial hole that is appearing in the accounts of many departmental councils’.

As an example, if you’re buying a €250,000 property in France on or after 1 January, you’ll pay an extra €1,792 in stamp duty (€14,517 rather than €12,752).

This rise in stamp duty, plus the additional fees to pay of 1-2% of the property’s sale price, will make the extra costs associated with buying French holiday homes some of the most expensive in Europe.

Go to French-Property.com to see a breakdown of the current fees and taxes when buying properties in France.

Published: 26 September 2013

French income tax made easier

French income tax19 June, 2013

It’s always good news when tax is made a bit simpler. And that’s just what’s happened in France as the income tax (impôt sur les revenus) and social charges tax (prélèvements sociaux) are now being merged into one annual payment.

Although the combination of payments sadly won’t make your final tax bill any smaller, it will at least give a better upfront idea of how much you owe all in one go. Plus, there’s no more waiting for that dreaded second letter.

For more details on payment methods and timings, take a look at:
http://www.french-property.com/news/tax_france/collection_impot_social_charges/


The content of this blog is intended only to provide a summary of matters of interest. It is not intended to be legal advice.

Income tax to hit Andorra: a sign of the times?

Andorra4 June, 2013

Has the Euro crisis heralded the end of the tax haven? The head of Andorra’s government, Antoni Marti, has announced he’ll instate income tax to bring Europe’s sixth smallest nation into line with international tax standards. This will be the first time that such a tax has applied to personal income in Andorra.

The new bill has been proposed in the wake of finance ministers calling for stricter measures against tax evasion, which is said to cost the EU £850 billion a year.

Read the full story here: http://www.bbc.co.uk/news/business-22745895

Expats urged to seek advice on new tax laws before deciding to leave Spain

Capture17 May, 2013

New financial reporting requirements in Spain have prompted many expat residents to think about leaving the country. The new tax laws require anyone who resides in Spain for more than six months of the year and owns overseas assets amounting to more than 50,000 euros to declare them.

Although this will certainly ring true for many expats, those affected should seek financial advice before deciding to leave as there may be ways of reducing the impact of the new laws.

Read the full story here: www.telegraph.co.uk

Economists propose ‘wealth tax’ for the Eurozone

25 April, 2013
tax_2A group of leading German economists have proposed a tax on property and other assets in struggling Eurozone countries in a bid to fund future bailouts. If this goes ahead, holiday home owners could be affected.

It’s been suggested that home owners in the weaker economies should be called upon to pay a ‘wealth tax’ to contribute to the costs of any bail-outs. Angela Merkel’s advisors say that Germany has been under great strain to help with bail-outs and that the responsibility to stabilise the Eurozone should be shared among richer households in other countries too.

For more on this, visit: www.telegraph.co.uk

Council Tax changes in England, April 2013

7 March, 2013

counciltax

Second homes currently attract a council tax discount of between 10% and 50% at the discretion of the county council. Formally speaking, as of 1 April 2013 both the Council Tax (Exempt Dwelling) Order 1992 and the Local Government Finance Act 1992 are being revised to remove the minimum 10% discount.

In layman’s terms, local authorities will have the right to completely remove the council tax discount for furnished second homes.

Some councils, such as Cornwall, have already stated their commitment to removing the discount, but it’s worth checking with your local authority to see how this may affect you.