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PROPERTY

Three ways the 2022 budget makes it easier to buy or renovate French property

Last minute amendments to the 2022 budget include a number of measures that will make it easier to buy and renovate property in France.

Published: 16 November 2021 13:57 CET
A residential housing block stands tall in northern France. The government is taking measures to support the property market beyond next year's elections
The French government is taking measures to support the property market beyond next year's elections. (Photo by JEAN-FRANCOIS MONIER / AFP)

As the 2022 Budget is being debated by the French parliament, the government has added a number of measures aimed at boosting the property market. 

  • Zero percent interest loans for low-income to be extended until the end of 2023

Zero percent interest loans (PTZ) have existed in some form for home buyers in France since the mid 1990s.

In its current manifestation, these loans are available to first-time and low-income buyers, seeking to invest in B2 or C zone properties (which excludes Paris), and not earning above a fixed amount (which varies according the number of people who will live in your future household).

They are available to buy property, but also to do renovations on property that you already own if you bought it less than two years ago.

Those benefiting from these loans must use the purchased or renovated property as their primary residency and must move in as soon as possible. The loans can cover up to 40 percent of the required investment. 

These loans were due to be scrapped or reformed by the end of 2022, but will now likely be extended to the end of 2023. 

  • Zero percent eco-loans also to be extended until the end of 2023

The same goes for the so-called éco-PTZ – which are zero percent interest rate loans that can be used for property renovations aimed at reducing household emissions through insulation or renewable-powered heating.

These loans will be maintained at least until the end of 2023, with the ceiling raised from €30,000 to to €50,000. The éco-PTZ like regular PTZs are issued by banks.

  • Denormandie framework extended until the end of 2023 

Those buying properties in certain neighbourhoods, to renovate and then rent, can currently benefit from the dispositif Denormandie, which means they see a reduction in income tax (on money generated from the rent).

The purpose of this law is to facilitate the regeneration of various communes in France suffering from under-investment. You can check whether you could benefit via this interactive map. 

The Denormandie framework will likely be extended until the end of 2023. 

Grants

In addition to the loan options outlined in the Budget, there are also a number of government grants available for home renovations, particularly those that make the property more energy efficient – the largest such scheme in MaPrimeRoniv, which is also available to second-home owners. Full details here.

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TAXES

Explained: France’s exit tax

Planning on leaving France? You may, depending on your circumstances, be charged the 'exit tax'.

Published: 11 April 2024 11:28 CEST
Explained: France's exit tax

Like some other European countries, France does have an exit tax for those (French or foreign) who are leaving the country. It’s known by the English name l’Exit tax.

However, it won’t affect most people.

Only those who have been tax resident for a minimum six years of the 10 years immediately before they permanently move out of the country are liable to pay an exit tax – if, that is, they own property, titles or rights worth a minimum of €800,000, or that represent 50 percent of a company’s social profits.

If that affects you, the best advice is to seek expert individual financial advice before moving out of France for good. The relevant page on the French government’s impot.gouv.fr website says it is possible to defer payments, and some relief is available.

Because of the relatively high figures involved, this tax is irrelevant for most people. That said, however, you will still have to inform tax authorities that you are moving out of the country because you may still have income, property and capital gains taxes to pay.

Income tax

You must inform the tax office that you are moving and give them your new address so that your tax declarations can be transferred to your new address.

You are liable for tax on everything you earned in France prior to your departure as well as on any French earnings that are taxable in France under international tax treaties that you earned after your departure.

The year of your departure, you declare your previous year’s earnings as normal – declarations in spring 2024 are for earnings in 2023.

A year later, you will have to declare any earnings taxable in France from January 1st up to the date of your departure, and any French-sourced income taxable source until December 31st of the year of your departure.

If you continue to have any French-sourced income – such as from renting out a French property – you will have to declare that income annually, using the non-residents declaration form.

Property taxes

You will have property taxes to pay if you own a French property on January 1st of any given year – whether it is occupied or not. 

Property tax bills come out in the autumn, but they refer to the situation on January 1st of that year, so even if you sell your property you will usually have the pay a final property tax bill the following year.

Moreover, if you receive income from property in France or have rights related to that property (such as shared ownership or stock in property companies), as well as any additional revenue connected to the property, during the year you leave France, you will be required to pay taxes on these earnings.

If any property assets in France exceed €1.3 million on January 1st of a given year, you may also have to pay the wealth tax (IFI).

READ ALSO What is France’s wealth tax and who pays it?

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Capital gains tax 

If you sell your French property or share of a French property, you may be liable for capital gains tax at a rate of 19 percent. It will also be subject to social security contributions at the overall rate of 17.2 percent.

Capital gains tax varies depending on how long you have owned the property and whether it was a second home or your main residence.

READ ALSO How much capital gains tax will I have to pay if I sell my French property?

The good news is, if you move to another EU country, or any country that has a specific tax agreement with France, you may be exempt from capital gains tax for non-resident sellers on the sale of a property that was your principal residence in France.

If you move elsewhere, you may be able to claim exemption on capital gains tax up to €150,000. As always, you should seek expert financial advice.

Tell Social Security

Inform social security that you are leaving France permanently – and return your carte vitale if you have one. If you do not, you may be liable for any benefits you receive to which you are no longer entitled.

More mundane tasks involve informing utility and water companies, your internet provider, if you have one, the phone company, your insurance companies, banks – and La Poste, who will be able to forward your mail for up to 12 months, for a fee…

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