A likely increase in French taxes paid will be seen for UK residents that own property in France, starting January 1, 2012 because of two key changes according to UK’s KPMG. One of those changes is the new annual tax that will be levied on non-French residents that own property that is not rented out, in France. A number of amendments made to the wealth tax rules in France have caused the second change to possibly affect property owning residents. In the changes are proposed amendments that would make properties worth more than 1.3 million Euros into the wealth tax regime.
The changes are potentially very significant says a KPMG spokesperson and those Britons owning property in France need to review them carefully in order to know how they will be affected. Even thought the rules start January 1 the full details are still not available, but at first glance some tax payers could see their tax bills double and also be facing wealth taxes. The wealth tax change is a double edged sword to the extent in which it affects Britons that have properties in France.
Those will properties valued by a company over 1.3 million Euros will be likely places in the wealth tax net and thus pay extra tax. But those already subject to the wealth tax but do not own their properties in the way they are taxed then their tax bills may be reduced. By mid July the proposals are scheduled to be accepted in law by the French parliament but are still subject to changes.
The opinion of KMPG is that the majority of UK residents with French property will be paying more taxes in the coming year. Non-French residents will pay additional taxes for residential property owned in France that is not rented out. The tax applies if it is owned by a company, trust or personally. This new tax is in addition to the existing taxe d’habitation and taxe fonciere that are taxes for rent and also taxes for all property owners levied for the value of the property.