Tax

 

 

 

SUMMARY OF THE FRENCH REAL ESTATE TAXATION

 

TYPE OF TAX

TAX AMOUNT

Recording rights

(including Notary fees)

Purchase of a new property: 2,5% of the amount of the purchase

Purchase of an old property: 8% of the amount of the purchase

Property tax

20% of the cadastral value of the property

Housing tax

20% of the cadastral value of the property

Income tax

+

Social contribution (*)

No tax if the property is not rented (if there is a tax treaty). If there is income: 20% (minimum) from 45% based in net income + social contribution 15,5% based in net income

Wealth tax

From 0,5% to 1,5% (From 1.3M€ in net assets)


 

Capital gain tax

+

Social contribution (*)

19% of the amount of the gain + social contribution 15,5%

Tax exemption on income from 22nd year of holding property

Tax exemption on social contribution from 30nd year of holding property

Inheritance tax

From 5% to 45% (from 1.8M€ wealth transmitted)

 

(*) this tax will probably not due for the non-residents (Council of State decision)

 

 

WHY USE A CIVIL COMPANY TO INVEST IN FRANCE WHEN YOUR ARE A KUWAIT RESIDENT

  1. CIVIL INTEREST

- The use of a civil society can change the succession law applicable in the event of the owner's death. Indeed, the French inheritance rules of private international law provides that buildings are governed by the law of the place of location, while other goods are governed by the law of the last domicile of the deceased. Under French law, the SCI shares are considered personal property and not real property: the law of the last domicile of the deceased is applicable to shares of SCI and not the law of location of the property.

- Allow to purchase in groups (family groups, friends groups…) while avoiding the problems of undivided. Indeed in France no one is forced to remain in an undivided. A Civil company specifically states the rules in sales and purchases of units.

 

  1. TAX INTEREST

TYPE OF TAX

TAX AMOUNT

Recording Rights

No effect

Property tax

No effect

Housing tax

No effect

Income tax

+

Social contribution

Depending to the tax option (income tax or company tax) chosen we can reduced the tax base and so reduce the amount of the tax (if we choose corporate tax we can use accounting depreciation so reduce the taxable base)


 

Wealth tax

If the acquisition is made with a credit = no tax (if the credit is equal to the value of the property)

If the value of the share of each associates is less than 1.3M€ = no tax

Capital gain tax

+

Social contribution

No tax (article 11 of the tax convention) if you sell shares (and not property) and if the company (who own the property) has opt for corporate tax (and not income tax)


 

Inheritance tax

Pursuant to article 17 of the tax treaty, there is no inheritance tax if the estate is based on shares of a civil company, and pursuant to the official bulletin of taxes number 7G-5-99 (annex III)

 

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