Speaking about French Tax System to an Investor often leads to shouts of desolation.

In fact the French Riviera Area is well being and nobody can deny the increasing interest of French or foreigners Investors for the Property Market.

Despite of an upward trend to the prices per m2 the most in demand real estate products are the top-range properties or less prestigious units but ideally located. The vast majority of clients for the market are indeed foreigners attracted by a rapid and consequently capital gain.

Therefore is the fiscal background an asset question when time is to resale which certainly grants more the resident of the European Union, whose taxable capital gain will be reduced to 16% whereas French residents are taxable up to 27% and residents out of the European Union are taxed at the rate of 33,33%.
Nevertheless each case should be specifically studied and should received advises from a Law Professional like Public Notary, because each case is particular.

Indeed, each resale is not always taxable and can be exempted in the same way as for the French resident : if the value of the property is less than 15,000 € or if it has been owned for more than 15 years. Sometimes these exemptions are specific to non residents because of bilateral tax regulations existing between the countries, like the Luxembourg : for example all capital gains are exempted in France when a Luxembourg company resales its property, at least until to the end of 2007, if a duly fiscal residence certificate in Luxembourg is provided.

But non residents, are they a person or a company, have a legal compulsory obligation when they are re selling; this is to appoint a tax representative if the share of the price of sale to be received is over 150,000 €.

A tax representative is a company accredited by the French Tax Administration which will make the calculation of the tax, guarantee its accuracy, will be required to answer the Tax audit, and even undertake to pay the tax and penalties in the event of tax adjustment.

These companies are quite few but high specialised in the study of each case.

Regarding the rental incomes earned through a long or a furnished lease, they are taxed like all the incomes earned in France either at the income taxe’s rate or at the specific tax rate of the companies. The filling tax declaration of the non resident should be sent to PARIS at the Office for the Non Resident and the tax will be calculated depending of the patrimonial situation.

If the property investment remains for the non resident so attractive in our area regardless of the quality of life, it is mostly because of the simple but very attractiv tax system.

By the way, isn't the French Riviera becoming a Tax Paradise ?