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PROPERTY

EXPLAINED: The new French property declaration form for SCI owners

France's new property tax declaration has been creating problems for those who own their French home through an SCI - here's what you need to know.

Published: 9 March 2023 10:07 CET
Updated: 7 May 2023 07:26 CEST
EXPLAINED: The new French property declaration form for SCI owners
The log-in page for the "Professionals" section of the Impots.Gouv.Fr website (Screenshot by The Local)

France recently introduced a new requirement for all property owners in France to fill in a property tax declaration.

This applies to anyone who owns property in France – whether it is their main residence or a second home – including those who live in another country.

You can find full details about the declaration and how to fill it in HERE. 

But people who own their property through an SCI have run into problems with their declarations.

An SCI – société civile immobilière – is a non-trading real estate company made up of at least two people. Essentially, it allows people to own property such as a second home through shares of a company, rather than under their own name.  

Most property owners have been told to fill out the declaration by simply going onto the website impots.gouv.fr, logging into their personal space and then clicking on Biens immobiliers (real estate) in the menu bar along the top of the website.

READ MORE: UPDATE: New French property tax declaration – your questions answered

The site should then list the property or properties in your name, and you can fill out the déclaration d’occupation for each, stating whether it is your main residence or a second home.

However, many SCI property owners have found themselves perplexed to not see their property show up after logging onto their personal space on the impots.gouv.fr website.

This is because, according to French tax authorities, owners of SCI properties should carry out the procedure on their “professional” space, rather than their personal space – since an SCI is technically a business that owns the property.

Anyone who runs a business in France will already have a ‘professional’ tax account, but SCI property owners will need to set one up in order to make the legally-required declaration. 

You can set one up by going to the website impots.gouv.fr and clicking “Votre espace professionel”.

Next, you will click “Créer mon espace professionel”. Fill out the required information, keep in mind you will need access to the SCI’s SIREN number and the company’s official email address.

Form to fill out to create a “professional” space on the Impots.Gouv.Fr website (Screenshot by The Local)

The tax office for your département will send you an activation code by post as soon as your space creation request has been validated. You will then have 30 days to activate your space and fill in your bank details. Once this is finished, you ought to be able to access the online service immediately.

READ MORE: EXPLAINED: The advantages and pitfalls of buying French property with an SCI

The deadline to have completed the declaration is June 30th, and people who have a property registered should receive notification from the tax office. 

You will then receive your property tax bill in the autumn as usual. 

This is a one-off declaration so you won’t have to do it every year – only when your situation changes, so for example if you sell the property, buy a new one or change from it being a second-home to your main residence. 

READ MORE: What should I do if I want to dissolve my French property SCI?

Member comments

  1. Not trying to be a pain, but my Professional Space has been set up for my SCI owned apartment for three years already and there is still no link to do the tax declaration. Has anyone else had this problem?

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For members

AMERICANS IN FRANCE

Americans in France: Will my tax situation change if I get French citizenship?

If you're thinking of applying for French citizenship, then you might be curious whether there will be any tax ramifications to becoming a dual national.

Published: 2 May 2024 16:44 CEST
Americans in France: Will my tax situation change if I get French citizenship?

Gaining French citizenship can have plenty of benefits for Americans living in France, from the right to vote in French elections to freedom of movement in the EU – as well as a more intangible sense of belonging in the country you now call home. 

However, Americans living abroad always have to contend with the United States’ system of citizenship-based taxation, which requires US nationals to report their global income to the IRS yearly, however long they have been out of the country.

This may result in making two tax declarations every year if they move to a country – like France – which requires yearly declarations from all residents.

As a result, Americans have to think about possible tax consequences before making decisions to move, invest, or perhaps take on a second nationality.

To help answer the question of whether there are special tax ramifications for French-American dual nationals living in France, The Local spoke with tax expert Jonathan Hadida from HadTax.

Hadida said: “There is really no impact. You still have yearly reporting requirements to both countries, and from the French side you will still continue to give you the benefits of the tax treaty”.

Key items, such as your US-based pension, would continue to be taxed in the US and not France regardless of whether or not you take on French nationality too.

READ MORE: Ask the expert: What Americans in France need to know about 401(k) and other pensions

Unfortunately, many of the limitations Americans in France experience would also remain in place. French investment options, such as the Assurance Vie, would still unwise for dual nationals, as the IRS sees them as PFICs (Passive Foreign Investment Company).

While the Assurance Vie is a great tool for being tax efficient for non-Americans, and can offer alternatives to the regimented, traditional French inheritance process, for Americans living in France (including those with dual nationality) it can lead to lengthy and complicated dealings with the IRS. 

“To the US tax authorities, you are still American first, second, third and fourth place. They don’t really care that you are also French,” Hadida said.

“The only real change to your tax situation would be giving up your American citizenship, but keeping your US citizenship in addition to French citizenship does not really change anything.”

What happens tax-wise if I renounce my American citizenship?

Renouncing US citizenship is not as simple as scheduling an appointment at a US embassy or consulate, paying the applicable fee, and declaring that one does not want to be American.

There are several factors to consider, and depending on your situation, in the long-run it might be more advantageous to hold onto your US citizenship to continue benefiting from certain parts of the US-France dual taxation treaty (PDF).

For others, keeping US citizenship might be onerous with its yearly reporting requirements, as well as the difficulty it can pose with putting money into French investment vehicles due to citizenship-based taxation and FATCA (US legislation that passed in 2010 to track money laundering). 

While renouncing your American citizenship undoubtedly pushes you further out of the reach of the IRS, you should consider that you might owe an exit tax, if you are deemed a ‘covered expatriate’. Usually, this is only required of high-net worth individuals (worth more than $2 million).

According to the US expat tax site 1040 Abroad, this also includes people who failed to comply with tax obligations in the five years preceding their renouncement, as well as people who had “an average annual net income tax liability exceeding a specified threshold” (as of 2022, this number was set to $178,000).

People renouncing US citizenship can also be subject to a special inheritance tax on gifts made to US citizens or residents, following their renunciation. 

READ MORE: How to renounce American citizenship in France – and why you might want to

You should also think about your US-based investments.

“You would no longer benefit from the tax treaty in the same way if you give up your US citizenship. For example, Article 24 of the treaty covers investment income, making it taxable in the US and giving you a deemed credit in France.

You would lose this benefit if you renounce, and this could make a big difference if the taxation level is lower in the US, as it often is with dividends or capital gains.

“Your IRA and pension plans will continue to be taxed in the US because this is based on where the pension is earned, not nationality, but you might have to start filing a non-resident tax return to the US after renouncing citizenship,” Hadida said.

The tax expert said that renouncing citizenship should be decided on a case by case basis.

“Every situation is different, and for some people it might not make sense to give up certain benefits from the US-France tax treaty. You should speak with a financial advisor before deciding”, he said.

READ MORE: Divorce, stress and fines: How citizenship-based taxation affects Americans in France

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