Reading the information from French Property . Com below to my understanding is that you can have up to 30% discount on the value of uk rentals when declaring. Does any one know if this is correct? I can not find clarety any where.
Valuation of Assets
The value of the assets is as at 1st January of the tax year.
The principal residence benefits from a 30% discount on its open market value.
In relation to residential properties that are rented out the authorities would ordinarily accept valuation of such a property on the basis of capitalisation of the rent at the rate of 5%. Commercial properties can be capitalised at 8%. Where the tenant occupies the property as their principal residence, the tax authority accept up to a max 30% reduction in the open-market value. Where short-term lettings then merely 15% to 20%. Where the landlord is a professional (furnished, rental income over €23K pa equivalent to at least 50% of total income, excluding pensions) then the asset is exempt.
I can’t immediately find my source, but my understanding is that if you are a French resident then your world wide properties are subject to IFI if you meet criteria. And in which case it is logical that they would attract the similar abatements.
It is only if you are non-resident that they are not considered.
As Jane says, I don’t think you get this 30% reduction as a French resident. But you can, as far as I’m aware, deduct mortgages and other loans directly linked to the property from the value of the property when calculating the net IFI base.
Yes, this was what I was advised and like you I sold the, in my case, UK property and was pleasantly suprised when , as a French resident, because I’d owned the property for many years, saved 10’s of thousands of pounds that I would have needed to pay as a UK resident with a rental property.
I also have a UK rental property and wondered how it would be treated for wealth tax. I had read online (somewhere) that perhaps a 20% abattement would apply, though I couldn’t find anything official. When I asked my French accountant, she categorically said no. You CAN subtract mortgage amounts but there is no abattment.
I searched around a bit further and came across the below info which I think explains this for me. There is no automatic abattement but if you can make a case that having the property occupied lowers its value you could maybe make a case. I can see why this might be true of a rental property in France because of the strong renters rights, but I don’t think that is the case for my property in the UK so I’m going to report the full value.