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Fresh financial implications for British-owned French properties

France has always proved a popular choice of the British when buying property overseas. Following Brexit, however, fresh rules mean British Citizens now face some hefty financial implications.

Council tax rises

For starters, British nationals with second homes in France may face a surcharge of up to 60% on local council taxes depending on the location of the property. If you own a property for your own use, or to rent out, do check the latest position of your council tax in that area given your British status.

Selling your property in France

Following Brexit, Britons can spend only 90 days in the EU in any 180-day period without a visa.  It has prompted some to consider selling their French property, however this now comes with increased obligations for British citizens.

Firstly, the government-appointed ‘notaire’ for the sale will require that you appoint a fiscal representative for sales over €150,000. Bear in mind that Fiscal Representatives often charge between 0.7% and 1.5% of proceeds, so do factor this into your budgeting of the sale.

You are not obliged to appoint the representative suggested by the notaire, so ensure that you take time to appoint one charging reasonable fees as the suggested representative may not always be the cheapest.

Social Levy

Additionally, Non-EU Residents must now pay an increased social levy of 17.2% upon the sale of French property, however, this will taper on a reducing basis after 5 years of ownership. With the increase in Capital Gains Tax for non-EU residents to 19%, this means a total charge of 36.2% for property sales.

Further costs to factor in

Logistics, increased paperwork and higher duties between Europe and Britain are also prompting the cost of moving back to rise significantly.

Can we help?

Our international tax experts are helping clients with property in France navigate the changes since Brexit.  Also, drawing on our membership of AGN International – a global association of separate and independent accounting and advisory businesses – we are helping them appoint the local fiscal representatives they need in order to comply with the latest rules.

If you would like to discuss the financial and tax implications of your overseas property, please speak with your Shipleys contact or one of our specialists shown on this page.

Note, specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary. If you would like advice or further information, please speak to your usual Shipleys contact.

Copyright © Shipleys LLP 2021

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