Non-French company – French real estate & French taxes – Mind the trap!
Our clients often plan to purchase their French property using their company in the UK or other countries… If we generally manage to satisfy this expectation, we need to outline the tax implications for any non-French companies investing in real estate in France.
If you need any advice to plan your purchase in France, whether you are a person or a company, we can provide tailor-made advice.
Key points include :
1. Mind the annual 3% Tax!
Legal entities, both French and foreign, owning real estate in France as of January 1st, are subject to an annual 3% tax based on market value. There are exceptions to avoid this tax, including international organizations, entities with less than 50% of their assets in France, or those based in the EU or countries with an administrative assistance agreement with France to prevent tax evasion. In practice, many companies may qualify for exemption, but the paperwork is (as always) more important than ever!
2. Mind the Capital Gains Tax (CGT):
Gains from the sale of property in France are taxable. The tax regime varies depending on whether the property is directly owned by an individual or a company.
- For individuals, gains are taxable with a complete exemption after 22 years (30 if we include the social tax side) of ownership.
- For companies, taxation depends on the entity type and may involve different rules for calculating capital gain. Non-French companies will calculate their CGT from the depreciated figure… Put simply, the longer the company owns the property, the higher the taxation is.
Contact our international team now to secure and optimize your transaction.
You can also call us :
📞+33 (0)4 7924 6222