The French property market – Good news for British property owners in France as gov cuts post-Brexit social charges
If you live in the UK and either rent out your French holiday home or have plans to sell it, you will be pleased to hear that the French government have now waived the additional social charges that had been applied after Brexit.
For British people who both reside in the UK and are part of the UK’s social security system, this change means that the full social charges rate of 17.2% will be cut and instead only the “prélèvement de solidarité” at 7.5% will be applied.
According to an article in The Connexion (France’s English-language newspaper), it applies to: capital gains tax on the sale of a property owned by British residents; rental income on properties in France owned by British residents; and dividends, interest and capital gains on stocks and shares.
The Connexion shared an example of what a difference the adjusted tax rates could make on a property sale. For a property bought in 2012 at €250,000 and sold in 2022 for €350,000, the chargeable gain – after an abatement for 10-years’ ownership – is €91,750.
While charges at 17.2% create €15,781 of tax due, charges at 7.5% make €6,881. Therefore, the saving on social charges is €8,900.
Complete France offers another example for rental properties, explaining that if a gite generates a net rental income of €5,000 a year, then the social charge would have been €5,000 x 17.2%, which is €860, but now owners will only need to pay €5,000 x 7.5%, which is €375.
For those who have been paying the higher rate since 1 January 2021, the French tax authorities have confirmed that it is now possible to apply for a refund.
“This is excellent news for our clients who own property and generate a rental income in France,” says Tim Swannie, Director of Home Hunts.
“Understanding the tax system and how capital gains and social charges work here can be complicated, so I urge any of our clients who would like further clarification on these issues to get in touch,” he adds.
“We can help our clients directly, as well as put them in touch with a tax specialist who can ensure they are paying exactly the right amount and oversee any refund that is owed.”
If you are looking to buy a property in France then visit our extensive portfolio at www.home-hunts.com, but to speak to a consultant directly about the French property market call +33 970 44 66 43 or email firstname.lastname@example.org.