The direct or indirect ownership of real estate located in France by non-French residents - whether individuals, French or foreign legal entities, trusts or similar institutions - as well as the management of such assets, give rise to tax obligations in France.
Individuals who are non-domiciled in France for tax purpose may be subject to:
- French income tax on their French source income, notably any rental income;
- French real estate wealth tax over their French located real estate assets they hold directly or indirectly, which net value exceeds EUR 1,3 million as at 1 January of each year.
In this regard a French income tax return (for 2023) and a French wealth tax return (for 2024) must be filed by May 23, 2024.
Any French or foreign legal entity, trust or similar institutions, regardless their legal form, that owns directly or indirectly real estate property in France on 1 January of each year is subject to a 3% annual tax levied on the fair market value.
Some exemptions may apply and more particularly:
Legal entities that have their registered office in France, in a Member State of the European Union or in a country or territory that has concluded an administrative assistance agreement with France to prevent tax evasion and avoidance, or in a country that has concluded a treaty with France allowing them to benefit from the same treatment may be exempt this 3% tax provided that they file a no. 2746 return each year and disclose the shareholders, the number of shares, the fair market value.
This return must be filed by May 15, 2024.
Any French or foreign legal entity whose purpose is to hold, manage real estate assets in France which may be leased to third parties or whose shareholders keep the free use, must file a no. 2072 return each year.
This return must be filed by 3 May 2024 (by paper) or by 17 May 2024 (online).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.