French Property Taxes
Irish & UK Residents are taxable on worldwide Income and Gains. You are generally considered tax resident in Ireland & the UK if you spend at least 183 days in that country per year. There are additional criteria that may also deem you to be tax resident.
As a person who is tax resident and domiciled in Ireland or the UK you are liable to tax on your worldwide income and gains. Therefore, if you own and rent a property in France you are liable to income tax on the rents you receive and capital gains tax (“CGT”) on the gain if you decide to sell the property. (In addition to any French taxes that may be imposed).
In other words, as an Irish / UK resident and Irish / UK domiciled person, no matter where your property is situated, if you receive rental income or you make a gain on the sale of your property – you are always assessable to tax in Ireland / UK.
Local Taxation of French Rental Income in Ireland / UK
- Treat the property as though it is an investment property and deduct all of the allowable deductions available under Irish / UK legislation.
- Tax the net amount at the marginal rate of tax plus assocated levies.
- Take a credit for the French tax paid.
- Record the French income received as Schedule D Case III in your income tax return and submit the return together with your Case III calculation. Note: if you calculate a loss, this can be carried forward and set against any future Case III liabilities.
Local taxation of French Capital Gains in Ireland / UK
When you sell your French investment property you are liable to CGT in Ireland and the UK on the amount of the gain. You may also be liable to CGT in France – see below.
CGT Payment Dates
- If you dispose of a chargeable asset on or before 30 November in the tax year, you are obliged to pay Irish CGT at 33% on the gain by 15 December in that tax year.
- If you dispose of a chargeable asset between 1 December and 31 December in the tax year, you are obliged to pay Irish CGT at 33% on the gain by 31 January in the following tax year. [Differing rates and dates apply to disposal depending on when it was sold]
- If you dispose of a property on or before 5 April, you must report this by the following 31 December.
- If you disposal of a property between the tax year 6 April 2017 & 5 April 2018, you must report this by 31 December 2019
French Capital Gains Tax Paid
In most cases, upon disposal of a foreign property you will have paid CGT in the foreign jurisdiction. Therefore, depending on whether a double tax agreement exists between the country of residence and the country of disposal, you should be entitled to a tax credit for any foreign tax paid on the gain.
France has a double tax treaty with both Ireland and the UK. What this means is that where an Irish / UK tax resident individual pays French CGT on the disposal of a French property, a credit will be available when it comes to making your Irish / UK tax return.
In other words, you should not pay tax twice on the same disposal (except where the Irish / UK tax due is higher than the French tax paid – in that case the difference is payable).