This tax applies to the net value of any real estate asset owned in France by non-French tax residents. In the case of ownership of French real estate(s) through the medium of a company, this tax applies to the proportion of the value of the shares further to the property ratio out of the full company’s assets (i.e. French real estate property / divided by the full assets of the company).
In the case the Net French taxable assets of the non-resident exceeds 1.300.000 Eur on the 1st of January of each considered year, the annual Wealth Tax is due following a bracket evolving with the size of the said taxable assets:
|French net assets||Tax brackets||Tax rate||Amount per brackets|
|Between||0 and 800 000€||0%||0 €|
|Between||800 000 and 1 300 000 €||0,50%||2 500 €|
|Between||1 300 000 and 2 570 000 €||0,70%||8 890 €|
|Between||2 570 000 and 5 000 000 €||1%||24 300 €|
|Between||5 000 000 and 10 000 000 €||1,25%||62 500 €|
|Between||more than 10 000 000 €||1,50%|
It must be noted that for the computation of the net value of the assets, any liability duly justified may be deducted, as long as it is connected with the asset, and under normal conditions (interests, duration, repayments conditions…) such as a loan granted by a Bank (this is preferable to a loan by another Entity, as French tax authorities may try in such case to characterize the identity of person between the Borrower and the Lender…) and preferably with a charge/mortgage against the property.
In fine-Interest only bank loans are retreated in “amortizing loans” by the FTA (French tax authorities).
When the gross assets value (of the Property or of the shares of the Company owning the property) exceeds 5.000.000 Eur worth, then the personal debts may not be entirely deductible and are caped to a certain ratio:
- debts are 100% deductible up to 60% of the gross assets value;
- debts are 50% deductible for the part exceeding 60% of the gross assets value.
When the real estate is owned through the medium of a company: The shareholders loans or current accounts lodged in Companies (themselves owners of the Property) may be considered as nondeductible liabilities of the company when defining the value of the shares from a Wealth Tax point of view. The other debts are fully deductible from the assets regarding the valuation of the shares.