The multiplicity and complexity of tax provisions applicable to real estate sometimes sow confusion in the minds of investors and ends up making real estate less attractive. A good knowledge of real estate taxation remains today the safest way to optimize your investment. This file takes stock of the various measures affecting real estate assets and takes into account the latest reforms. However, it does not address taxation that applies to complex structures or tax exemption operations.
The annual declaration of land revenue is binding on all investors. If you receive more than € 15,000 in annual rent, you have no choice, you must opt for the real plan, an irrevocable option for 3 years.
Each year, the investor declares the income and expenses on the special declaration form for land revenue ( CERFA 2044 ). The information folder gives all the necessary information on deductible expenses . They generally concern:
If the annual rental income is less than 15 000 € , you can opt for the regime of micro land, but nothing prevents you to choose the regime of the real even if your property income is low. This plan greatly simplifies the declaration. No need to use 2044, since the only thing to do here is to postpone the amount of gross rents. The tax authorities will apply a standard abatement of 30% .
Note that this is a faculty and not an obligation, but you will understand: if the deductible expenses are higher than the package, it will be more interesting to opt for the regime of the real.
The taxation of real estate capital gains has been the subject of numerous changes over successive financial laws. Note two new measures effective January 1, 2016:
Taxation applies to all private assignments, whether they concern immovable property or the related annexes, except for the exemptions provided by the legislator, such as:
The calculation is established in 3 steps:
(1): the ceiling is understood by operation. It is thus possible to benefit from the exemption on several sales during the year.
(2): the calculation is done separately.
Surcharge on capital gains over € 50,000
Since 1 January 2013, a surcharge has been applied on real estate gains above € 50,000. See here
|Duration of detention||In respect of income tax||As social security contributions|
|Under 6 years||–||–|
|From 6 to 21 years old||6%||1.65%|
|22 years old||4%||1.60%|
|More than 22 years||Exoneration||9%|
|After 30 years||Exoneration||Exoneration|
Little or badly used, the mechanism of the land deficit allows to impute the negative result on the declaration of taxes on the income within the limit of 10 700 €. This amount is assessed without taking into account the interest on the loan. Note that the portion of the deficit above the ceiling can be carried forward for the next 10 years , provided that the property is leased until the end of the third year following the postponement.
French non-residents are subject to the same tax rules, especially since the reinstatement of social security contributions on 1 January 2016 (1) , except for exemptions. Non-residents do not benefit from the exemption for the principal residence or a first real estate sale. On the other hand, the administration grants them a specific exemption limited to € 150,000 under the twofold condition:
(1): deleted by the European directive in 2015.
You are not required to report property held abroad if it serves as a second home. Only rental income from real estate held abroad is reportable in the property and taxable income category – unless otherwise agreed opposite between France and the country of residence – in the same way as property held in France. The same goes for the declaration of the capital gain. We must follow the rule of the tax treaty between countries when it exists. In his absence, you will pay the capital gain in France.