SHARE
COPY LINK

TAXES

Don’t miss your upcoming tax deadlines in France

The deadline for paying your income tax bill in France may have passed but there are other taxes that need to be paid tout de suite.

Don't miss your upcoming tax deadlines in France
Photo: AFP

We hope you have all paid your 2015 income tax bills by now, given that the deadline for paying by cheque or bank transfer was back on September 15th.  

But while you can tick that particular box in your “to do” list of French admin tasks, there are others that need your attention.

Here are the deadlines you need to beat to avoid having to pay a 10 percent increase for late-payment.

Taxe foncière

Home or land owners will have to pay their taxe foncière by October 17th, by either cheque, TIP payment or by cash. However for those paying on line the deadline is slightly later on October 22nd. The sum will be taken from your account on October 27th.

The taxe foncière is a property tax that is paid to the local authority, whether the commune or department and goes towards the funding of local services.

It is payable by anyone who owns a property on January 1st of any given year and is calculated on the basis of how much the property could be rented out for, multiplied by a percentage rate set by the local council. Home owners in France have to pay whether or their house is occupied or not.

A report earlier this year revealed that the levels of the taxe foncière had risen sharply in some regions around the country.

The French tax man takes his taxe foncière very seriously. The Local reported recently how the mayor of the seaside town of Sarzeau said he had received a letter from the public finance offices to a dead resident, addressed to “grave 24, row E, cemetery road”.

Taxe d’habitation

The deadline for paying your taxe d’habitation is on November 15th and you should be receiving your bills via email or the post any day now, if not already.

The tax is a residence tax, paid for by anyone living in a property, whether you’re the owner or just renting it.

For those paying online or through  the government app, the deadline is slightly later on November 20th.

If you have set up automatic payments then the amount of tax you owner will be taken from your bank account on November 25th.

Some tax payers may find that they have until December 15th to pay their taxe d’habitation and TV license. In all cases the deadline date will be written on the bill.

Contribution à l'audiovisuel public/Contribution to public broadcasting

This is the French equivalent of a TV license and the bills are sent out along with the taxe d’habitation bills.

The tax for owning a TV in France in 2016 is €137. The deadlines for payment are the same as for the taxe d’habitation – November 15th for payment by cheque or transfer or November 20th for payments made online.

Taxes on vacant properties

Anyone who qualifies to pay a tax on their empty property (basically it’s only applied in certain urban areas where the demand for housing outweighs the number available) will have until December 15th or December 20th if you are paying online.

For members

PROPERTY

French property: What is buying ‘en tontine’?

If you're buying property in France, you might be thinking about buying 'en tontine' - this has advantages especially when it comes to France's strict inheritance laws, but can also have tax implications.

French property: What is buying 'en tontine'?

What is it?

The ‘clause de tontine’ sometimes also known as a ‘clause d’accroissement’ is a clause that is inserted into the property deeds when you are buying a house or apartment.

It can only be inserted during the purchase, and cannot be added later.

It’s basically a ‘group purchase’. It’s most commonly used by unmarried couples who are buying together but it can be used by larger groups too – for example a group of friends buying a holiday home together.

You will have to ask a notaire to draw up the tontine clause during the property purchase and it can only be used if 

  • the parties are equally involved in the financing of the purchase
  • the parties involved have a roughly equal life expectancy (for this reason tontine clauses may be rejected if there is a significant difference in age between the purchasers)

What’s the point of it?

The main reason that people use it is to sidestep France’s strict inheritance laws, which assign that a certain portion of every estate must go to children, at the expense of a partner. 

READ ALSO How France’s strict inheritance laws work

For this reason it is particularly used by couples who have children from previous relationships.

On a property with a tontine clause in effect, when one owner dies their share of the property passes in its entirely to the other member/members of the tontine.

This cuts out children from inheritance, but means that a surviving partner is not evicted from their home in favour of the children of the deceased. 

It also has the advantage of making the intentions of the deceased clear, to avoid arguments among heirs after their death.

It should be noted, however, that the tontine clause only takes in the property that it covers – other assets may be subject to French inheritance law so it’s therefore probably wise to arrange a will, to ensure your wishes for your estate are met.

The surviving party can ask a notaire to update the property deeds to show that they are the sole owner, if they want. Be aware there will be a fee, which could reach four figures for the privilege – and it doesn’t actually involve any change to the property title.

Drawbacks

The advantages of the system are clear, especially for blended families, but there are some potential drawbacks too, which mean that anyone considering buying in this way would be well advised to take proper legal advice before they start.

Inheritance tax – while a tontine will help you to avoid restrictions on inheritance, it does not exempt you from inheritance tax. French inheritance tax is structured according to your relationship to the deceased, and people who are neither married nor related to the deceased pay an eye-watering inheritance tax rate of 60 percent.

The only exception to this top rate of inheritance tax is if the property is your main residence and it is valued at under €76,000 – in that case, tax is paid at a rate of 5.8 percent.

Married couples and family members pay a much lower rate or not tax, but if you’re not married to your tontine co-purchaser, be careful that you’re not lining yourself up for a massive tax bill in future years.

Wealth tax – depending on the value of the property, it could tip you over into the ‘wealth tax’ category when you inherit. France’s wealth tax is a real estate based tax and is levied on anyone who has real estate assets (property and land) worth €1.3 million or more.

The calculation includes property held en tontine.

Tax savings – you might hear tontines being advised as a way to limit your French tax liability.

While this used to be true, changes to tax laws means there are no no significant tax advantages to buying this way – the same is true for buying a property via an SCI, which used to represent a tax saving until the law was tightened up.

Disinheriting family membersOne side effect of the tontine clause on mixed families is to effectively disinherit any children of the first person to die.

Because the property passed to the survivor, under French law, only their direct descendants – rather than any family by marriage – are entitled to automatic inheritance.

That means that the children of the surviving partner will be entitled to the statutory share of the entire asset (between 25 and 30 percent depending on the number of children), but the children of the first person to die will be entitled to nothing. Obviously you can choose to leave them something in your will, but you can only leave them some or all of the estate which is not automatically given to the children on the survivor.

Divorce/dispute – if the members of the tontine split up or (in the case of friends) fall out, then they can either sell the whole property or agree to buy each other out.

However, if one party refuses to sell, then you have very limited legal options – unlike a standard property purchase a tontine is not regarded as joint ownership, so one partner cannot be forced to sell as part of a divorce procedings, for example.

Basically the tontine can only be ended or changed with the agreement of all parties – so if you can’t agree between yourselves then you may be stuck with it.

SHOW COMMENTS