If I buy an apartment or ski chalet in the French Alps do I have to pay tax on any rental income?
Yes, you must pay tax, in France all rental income is subject to tax and must be declared to the Tax Office in France by the 30th April each year. Less than 75,000 Euros per annum tax is paid on only 30% of the gross income, the remaining 70% you are allowed to keep, to cover your total expenses.
If your rental income is more than 75,000 Euros your running costs, mortgage interest payments, insurance, depreciation and all other business expenditure are included with your net income taxed at 25% which is the minimum level.
If I buy a property in the French Alps am I liable to pay Capital Gains Tax if I resell?
Yes, you must pay Capital Gains Tax if you resell. If you reside in France or not, all owners of French property are liable when they sell.
The calculation used to work out your Capital Gains Tax is the difference between purchase price (including any renovation work that is completed) and the sale price. The gain is taxed at the set rate of 16% for Europeans (which is an extra 10% Social tax for French Residents) or 33% flat rate for non-Europeans. New rules in force state any completed renovation work by a French artisan must have an invoice for work carried out.
Deductions are based on how long you own the property for before selling. Less than 5 years of ownership there are no deductions, but every year after that you can deduct 10% off your Capital Gain.
If you own your property for 15 years you are exempt from Capital Gains Tax however you will still be liable to pay tax in the UK.
If I own a property in the French Alps what are the annual running costs and taxes?
The annual running costs depend very much on the size of the property also included in these service charges are extra expense such as a grounds man who will be responsible for clearing snow and cutting grass. Maybe a caretaker and possibly a lift on site, is there a communal pool that needs attending? As soon as you know which property you will be buying we can give you an estimate of the running costs.
There are two local property taxes in France due around the end of each year and the figures are based on the administrative value of your property. The Public Administrator calculates these figures at the beginning of each year it is referred to as “Cadastral Value”
- “Taxe Fondere” this is exempt for the first 2 years in a new build property.
- “Taxe d’habitation”
However, if choose to purchase a re sale property the tax figures are available for you as soon as you decide on which property you want to buy.
In the UK there are construction guarantees for new build apartments; does this apply to French properties?
Yes, it does apply to all new build construction in France; they must have a 10-year guarantee against any hidden defects. You need to take out an insurance policy which will protect and support you if the constructor ceases to trade.
In my search for property in the French Alps, what information do I need to provide?
Make a list of your requirements and read through any property details that catch your eye. Inspection trips are vital not just to view properties but to get a feel for the location, you may find the ideal property but the area is not to your taste or vice versa.
Your list will help us to provide you with properties and resorts most suited to your specifications.
Below is a tick list of 10 useful questions that may help you:
- Which is your preferred resort? And desired transfer time from the airport to the resort?
- Do you want a family orientated resort or suitable for groups and couples?
- What is your maximum budget?
- What type of property do you want, for example, a chalet or apartment?
- How many bedrooms and bathrooms do you want?
- What size of property are you looking for?
- Proximity and location in the resort to lifts or base of the mountain?
- Are you looking for a year round resort?
- Type of ski domain? (Beginner, intermediate or advanced slopes)
- Are you considering renting it out?