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Australians in France: What you need to know about your pension

The food. The weather. The wine. The lifestyle. France has plenty to offer retirees - but it's always a good idea to check the situation around pensions before you move.

Published: 25 February 2022 15:02 CET
Updated: 28 February 2022 11:33 CET
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About 5,000 Australians live in France, but if you’re planning to retire here, there are some things you need to check first.

Claiming your pension

Australian and French authorities do not yet have an international social security agreement – and that means that if Australians living in France may not be able to claim their pension from Australia.

So, while you can be an Australian living in Austria, Belgium, Chile, Croatia, the Czech Republic, Spain or Estonia, among others, and still claim your Australian pension, this is not the case in France. 

What’s crucial here is when you move – if you start receiving your pension and then you move to France, it’s no problem.

If, however, you move to France before you reach pension age, then you will not be able claim.

A spokesperson for the Australian government told The Local: “To be eligible for Age Pension, a person must generally be an Australian resident and be in Australia at the time the claim is lodged, or in a country with which there is an International Social Security Agreement in place.”

There is no such agreement with France.

And, despite the efforts of some of the thousands of Australians living in France to get politicians in both countries to act, there appears to be little urgency to change the situation, which means it could be some time yet before we are able to give you any good news on the pension front.

More information on claiming Age Pension and residency can be found here: Residence rules for Age Pension – Age Pension – Services Australia and information on International Social Security Agreements here: International social security agreements – Services Australia

People that are already receiving the Age Pension are able to continue to do so when travelling or relocating outside of Australia even for longer periods of time. However their rate of payment and supplements may change, depending on their circumstances and the length of time they are outside Australia.

Relevant information can be found here.

There’s also some information about Pensioner Concession Cards while overseas here.

Tax matters

You should inform tax authorities in Australia that you’re moving to France. 

Pensioners here are treated favourably, with a 10 percent reduction factored in on income up to €36,600. You also pay tax as a household so you probably end up paying less tax than you might elsewhere.

If you own property in France expect to pay property taxes in addition to taxes on your income.

Once you have been living in France for three months you are entitled to register within the health system and if you become ill, incapacitated or need extra care as you get older, France has a generous social security system. 

As a resident of France, you will be required to file an annual tax declaration, even if all your income (such as a pension or income from rental property) comes from Australia.

EXPLAINED How to make a tax declaration in France

Currency matters

Be aware that currency fluctuations will mean that the amount that finally makes it into your bank account will change from month to month.

In all cases, it is best to obtain independent advice that’s appropriate to your personal situation, from a financial expert.

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For members

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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