We are trying to sell and may buy another, smaller house. However, it is a maison secondaire and we are liable for a lot of tax since the latest action. Our notaire is saying we will get almost no relief which we don't think is right. I am going to see another notaire but, another alternative is to make it our primary residence. Does anyone have up to date clarification as to what is allowed against the tax? Does anyone know how we could make it our primary residence and what committment we would have to entering into the French tax system etc?
Yes, thanks Brian. It will be in a state of conversion for sometime, and I had actually considered the caravan idea…there is water and edf…cheers KK
Is it in the process of 'conversion'. The barn being converted behind us by a French couple is being kept in a permanent state of conversion so that it is, to all intents and purposes, still a barn. It is nice inside but all very temporary. The owner, no fool since he has a business in Bordeaux, uses it for holidays, keeps a caravan on site, a chemical loo beside that and no connections including electricity since he has a small generator. His rationale is that he is virtually tax free and his son can also inherit without paying a vast proportion of the value of the place fully finished in taxes. If it compares to any degree with your situation, which Andrew will know more about and probably explain, then perhaps keep it in a state of conversion for as long as possible (and you can bear it).
Many thanks Andrew, the “normal” taxes I referred to were property taxes only not income tax. I.e. your foncieres and dhabitations, which I now realise are based on the property only.
Incidentally I understand that if you have a non functioning/ no bathroom, you don’t pay the dhabitations. A place I am looking at has an outside loo block with a piece of wood over a hole, going straight into the earth…no bathroom… No fosse septique. Any opinions on whether I will be taxed on the dhabitations?
no difference if you live in the UK or France, a second home, or third, forth etc. will be subject to the plus value/capital gains tax as detailed in the link I gave above. Normal taxes - that's a completely different question and will depend on where you spend more than half the year 183 days. ie where you are resident for tax purposes. if you live and work in the UK but own 10 houses in France you'll still pay tax in the UK.
I am new to all this, are we talking about having a secondary home in France, ie having two homes in France, or one in England and France.
Sorry if this has been answered, and thanks in advance but if you own two homes in France but live in England are there different tax implications ?
I’m thinking of normal taxes not CGT. Thx
Robin, in answer to your second paragraph - you can! you need receipts for work and there's a standard 7% (if my memory serves me correctly) for fees ;-)
Many thanks guys
A friend of mine just went to the maire and told him he was going to live full time here and cahnged residence status before he got into the system.
The capital gains tax has changed in Feb and again in August this year. I don't mind paying a legitimate tax but I think you should be allowed to set all renovation work done by a registered builder/electrician etc as well as the purchase cost against plus value tax
You need to be living there, pay your taxes there etc. If it looks dubious, they may ask to see EDF bills etc as proof that you have been living there! Depends also whether your notaire is prepared to turn a blind eye or not and just get you to sign the declaration that it's your résidence principale. As for plus value - you now have to have owned the property for 30 years for it to be exempt (increased from 15 years earlier this year). The tax is applied on a sliding scale so the longer you've owned it the less you pay, here's a pretty straight forward summary.
Have a look at the Useful Links page http://www.survivefrance.com/page/useful-links. Under taxation you'll find a couple of links on French Capital Gains Tax. The first link -- an official French site last updated in April -- may not answer your specific question but it's a good starting point. There is also a button you can click to ask a question by e-mail.