Good news for French Property owners - Less Wealth Tax to be paid - Impôt sur la solidarité fortune (ISF)

Until recently, wealth tax was payable by resident and non-resident* people in France where their total worldwide assets exceeded 800,000€ on a scale from 0.55% - 1.8%.

From 2012 the limit has been raised to a more realistic level of 1.3M Euros. Anybody having assets below 1.3M Euros is not subject to wealth tax. Assets worth 1.3M € to 3M€ are subject to a wealth tax new of 0.25% and over 3,000,000€ it is 0.5%.

Assets must be consolidated for all members of the household, including assets owned by children below 18 years of age. Couples must make a joint declaration whether they are married or not.

To calculate the tax, add up the total value of assets for the household and deduct all outstanding debts (including mortgage) and overdrafts as at 1st January.

Worldwide assets include

  • Land & buildings minus any mortgages or loans (principal & secondary residences, rental property - although for French tax residents the value of an occupied principal residence may be reduced by 30% for wealth tax purposes and there can be similar relief for let properties depending on the length and terms of a lease)
  • Financial investments (stocks & shares, bank accounts but not certain pension schemes)
  • Jewellery and precious stones
  • Furniture (however, virtually any object that you can claim to be over 100 years old - or created by hand, such as works of art - is normally exempt).
  • Cars, Motorcycles, Boats, Aeroplanes

*Those who are non-resident only need to declare the value of their property in France and not their total worldwide assets.

As always in these situations it is best to take financial advice but the good news is there is less tax to pay and the limit on your worldwide assets has been raised considerably.