Do Covid restrictions mean I have a case to withhold taxes?

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Anno
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Post by Anno »

Interesting to hear that some cities charge non-resident owners more, it's not the case in my town (which is small, not on the Med and does not have the same pull! :-)) - I wasn't sure that was possible. And as far as I know these local taxes are set by the city/town so rules can vary. I found this article showing that Nice recently applied the maximum increase for second homes
https://tribuca.net/collectivites_29833 ... es-senvole
- they also say it's a reponse to a) the future discontinuation of taxe d'habitation which had been announced and b) the lack of available permanent housing in these cities, ie they're hoping to encourage owners to sell or rent (as the taxe d'habitation is paid by tenants when there are tenants).
But these are also local taxes, a kind of council tax equivalent unrelated to how/when you actually use your property. They fund local amenities and operations, and they're going up pretty much everywhere as the national government is happy to shout about reducing taxes while shifting whole areas of responsibility, including responsibility for finance, to a more local level.

I don't suppose it'll be much consolation to you but a lot of French resident second home owners will also find themselves in similar situations to you this year... and in reverse, I am still paying for storage in the UK for stuff I thought I'd be able to bring back last June but it hasn't been possible due to a combination of lockdowns and quarantine requirements... Brexit + Covid has been a potent mixture! and I suspect will continue to be so.

Finally, I know this wasn't your question but if necessary, French tax offices are pretty open to negotiation of extensions or payment in instalments if you contact them, the best way is by email, which should be shown on your bill.
chrishax
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Location: Nice

Post by chrishax »

Thanks Anno. You have crystallised the situation in Nice better than I did.. the current situation is that foreign owners are heavily penalised as few places elsewhere are. Plus they push for occupancy, but prevent people arriving to occupy!

Our only consolation is we rent marketed through a Swiss company, whose clients are from Germany, France, Holland etc, so we got some occupancy last summer, and have some bookings this year also.

I guess overall we are lucky we have no cashflow problems per se, but the charging structure is manifestly unfair, when we do our best to occupy the apart almost year round.

The city problem I suppose is that there is a massive oversupply of property off season, and under-supply in season. I read that the population swells from 250-300k up to 750-800k in summer.
Anno
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Post by Anno »

The city problem I suppose is that there is a massive oversupply of property off season, and under-supply in season.
No, I think the difficulty for such places is not having enough housing available for permanent residents who need/want to live there all year round - which is a different thing from having properties occupied constantly, but by a series of different people. If the city council try to address the problem by modulating taxes, whether or not you see it as "manifestly unfair' obviously depends on personal position and perception.
Circé
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Post by Circé »

Despite trying to retire I am still looking after a number of second homes, four of which are owned by Australians and one of which is (or rather was, pre-Covid) regularly rented by US citizens.
All of them could only stay a certain number of days, either because they could not get healthcare cover for more than X days, or because if they spent too long here they could be deemed to be fiscally resident here (and back home, depending on their country's laws)

Britain chose to leave the EU, as a result the rights of British citizens to live or visit EU countries have changed.
As Moliere said in their post, from the French point of view nothing has changed except the classification of the UK from EU member to third country.

You are not alone chrishax in feeling miffed about visiting rights, lots of second home owners have the same feelings. And now with Covid they are worried about the upkeep of their properties.

I am interested to hear that according to you, chrishax, Nice charges a higher rate of taxe d'habitaion to non-French residents, could you give me a link to a source about that please? I ask as one of our Aussie clients is looking at buying in Nice, despite Covid!
chrishax
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Location: Nice

Post by chrishax »

Putting the comments together here, one of the two main governmental charges is the local one, and this level is set by the City of Nice. Currently much of this charge has been phased out for MAIN home owners, but not for second home owners. So second home owners currently pay perhaps a third more than 'locals' in total government taxes.

There were promises of eliminating this anomaly (as referred to by a poster above), but that has gone quiet, so for many reasons including spiralling public debt, and finding second home owners an easy target, you should assume that this penalisation will continue. Currently on my flat worth about 350,000 euros, that charge is around £ 1,500 a year (more than locals)

The policy on housing in Nice is both controversial and muddled. Firstly, the previous poster was probably unaware that many hundreds of thousands of additional residents are to be housed in a valley to the North West of Nice (where a new tramline has been installed, as well as an IKEA!)... because in reality the reason to charge second home owners is not really about the need for housing (and these policies don't work with private enterprise anyway, whether in Nice, London or Liverpool)

But Nice is effectively sustained by foreign money, so they can only push it so far. I don't see them ever changing the laws to be even more punitative, because over a half of properties in central Nice are owned by 'foreigners' or by Parisian holiday homers.

I will get a reference for you shortly in another post, but I did want to stress that choosing Nice to spend your own time in, especially in winter, is really attractive because of sun hours, and because of the fact that the town is half-empty but still remains open throughout the year, making residents much more pleasant off season.

In high season Nice is a sweaty zoo, and people use apartments in the hills to avoid the humidity, but these properties are not good all year round.

If however you are using it as a rental investment, there are other towns which probably charge less, or have less 'radical' (and historically corrupt) local governments. Yields are not as high in peak season than in other towns, because Nice is seen as more of a 'normal' town than Cannes or Antibes.

There is also a bonus to tourism newly with remodelling of the thoroughfares and in the tram (when they are not on strike/ralentissement) where you can get from the airport to your hotel for almost nothing.

If you are in at the rental level suitable for students and long term renters, then its a fair investment. The one thing to research closely is proximity to the tramlines, and also to avoid anywhere north of the trainline, except if it is close to the universities. Consider places such as Magnan or by the other university (to the north-east of city centre)

The additional local tax is much less of an issue than the other factors above.

As an additional consideration Capital Gains tax, and especially Inheritance Tax rules are very punitive in France for non residents, so it's best not to invest if you are already, say, 60, and are not married.

And you will also save a lot of money avoiding purchasing through Rightmove, and to stick instead to the ORPI network of estate agents. Rightmove often neglect to list the surface area in their listings, or include raised half-levels and balconies, both of which are locally unacceptable practice.

So, I'll look for a link for you, but also for you to read about the politics of Nice over the last 100 years, and to read up on the 3 major ethnic communities in Nice (Italians, British and Russians)

As you can see from the conversations above, Government stated intent and true reality are far apart, but this is true in the whole of France, due to both Brexit and Covid. Together with the scattered terrorist events, this makes Nice a less likely town to have increased property prices in the next 5 years....which means there is little lost in taking your time and doing further research.

Hope all that helps.
chrishax
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Location: Nice

Post by chrishax »

...so there's a link in an earlier post above intimating a reduction, but the following post is one example among many of how high the rates may go for second homes...

https://www.blacktowerfm.com/news/566-e ... -to-france
Circé
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Post by Circé »

That's old news, chrishax.
The tax surcharge referred to in that article only concerns big cities, second home owners elsewhere are not affected.
Have you found a source for your statement that Nice charges a higher rate of taxe d'habitaion to non-French residents?
chrishax
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Location: Nice

Post by chrishax »

If it's their main home, not directly, but they would need to be citizens to be resident !!!!
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Moliere
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Post by Moliere »

chrishax wrote:If it's their main home, not directly, but they would need to be citizens to be resident !!!!
No they wouldn’t. I’m a French resident, but not a French citizen.
Jumping is just dressage with speed-bumps.
Circé
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Post by Circé »

I am waiting, chrishax, for a source justifying your statement....
chrishax
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Location: Nice

Post by chrishax »

you seem weirdly angry Circe, that I picked up from the lack of appreciation for all the other aspects of my answer on other questions....please dont be a total troll.
Anno
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Post by Anno »

Circé (and anyone else interested), I haven't found anything at all online that says additional taxe d'habitation can be charged to non-resident owners, only that it can be levied on second homes. As far as I can see any surcharge applies to second home owners whether they live elsewhere in France, or in any other country (and as we know, actual nationality has nothing to do with it).
Even the official French tax authorities' site about non-residents and these taxes says nothing about it being different for non-residents and residents: https://www.impots.gouv.fr/portail/inte ... ots-locaux

Here's an informative page about the "surtaxe" :
https://www.toutsurmesfinances.com/impo ... n_pourquoi
which interestingly says you can ask for a reduction/exemption from the additional tax (i.e. not the basic taxe d'habitation) if you can't use your property as a main residence for specifically defined reasons, including having gone into a care home... but not being able to use it as a holiday homes isn't one of the reasons.

chrishax, my taxe d'habitation is about the same as yours for a house that costs a lot less, in a non-touristy town of about 10000 people with a hell of a lot fewer amenities than Nice!
And regarding capital gains tax and inheritance tax being higher for non residents, I think you're mistaken, see https://www.impots.gouv.fr/portail/inte ... mobilieres - it clearly says the same rules apply for residents and non residents alike.

I remember an English friend a few years ago who was cross that CGT was being put up for non-residents - I had to explain to him that he was right, it was going up, but it was going up to the same level as paid by residents! The newspaper article he'd read totally failed to mention that...
chrishax
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Joined: Fri Mar 12, 2021 7:35 pm
Location: Nice

Post by chrishax »

As you say, Anno, the taxes d'habitation issue is linked to second home owners...but as established above the only foreigners not to pay it would have to register it as their main home, which for UK (and Australian) nationals would be very problematic now, but still feasible if you were clearly intending to make your home in France under one of the few permissible conditions.

(A better moniker for the surcharge would be 'non-habitation')

The information about exemptions you mention is interesting, the nursing homes suggests a sort of uncontrollable finality, but travel prohibitions are similarly 'total' in their effect. Again, just this week the UK government has added to the exemptions for travel the reason of preparing a home abroad for sale or rental as an acceptable reason for travel.

Reference here: https://www.theguardian.com/politics/20 ... cond-homes

The travel conditions within France will obviously have a different timing to the UK, due to the fact we had a third wave/second lockdown earlier, but as 'an act of God' we have already been prevented from travelling to Nice.

The CGT and IHT was not a comment linked to excess for foreigners, purely to the Australian prospective buyer intimated by C... so, for example, while many countries have no IHT or very high thresholds, France's 60% levy on non-blood relatives/non-married is an extraordinary shock to a prospective foreigner. So anyone from a foreign country will doubtless be surprised and can be caught out by the wide difference in these rates of taxation in France.

I guess any foreign buyer's due diligence will also include SCI's and so forth, but it is very surprising how different the overall tax burdens are between even EU countries.

Finally, on the issue of charges, I was giving an impression of the excess charges, with both combined taxes coming at about 5300 euros in total (habitation + foncieres)
Circé
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Post by Circé »

chrishax wrote:you seem weirdly angry Circe, that I picked up from the lack of appreciation for all the other aspects of my answer on other questions....please dont be a total troll.
I am not a troll.

I have been on this forum for a long time.

I like facts, not vague statements and I much prefer information from official sources to that found in journals and nnewspapers (print or online), unless the articles concerned quote accurate sources as well as giving opinions.

Anno, for example has just quoted useful references for anyone interested.
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oasiscouple
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Re: Do Covid restrictions mean I have a case to withhold tax

Post by oasiscouple »

chrishax wrote:As a UK non-French-domicile with a holiday home in France, I am subject to two sets of high property taxes (city and national I think), and yet I am not allowed to travel there at the moment, and am newly constricted to 90 days out of a rolling 180.

In that case, where I am denied practical usage by the French government, is anyone aware of a movement or 'right' to with-hold a portion of state and city taxes?

My end point would be that I am newly disallowed half of the year in residency, and yet already charged a premium as an overseas owner...and yet further disallowed time due to French Covid travel restrictions.

Any thoughts? !!!
My thoughts are that the question of having to pay for "Taxe d'habitation" on property in France not declared as your "résidence principale" applies to everyone, French or not, and is not a discriminatory tax for non French owners nor is it increased if you are not French.

I am British, officially resident in France as I have lived and worked here for many years and from this year due to the gradual cancellation of this tax, I will no longer have to pay it on my house which is my "résidence principale". However, my partner, who is French and owns a "résidence secondaire" in her own right has to continue to pay "taxe d'habitation" on her property as she lives with me and my house is also her "résidence principale".

Another point is that the level of tax for her property is particularly high as it is in a tourist area and is not affected by nationality. It happens to be in a naturist village and all owners, French or foreign who are not resident, have to pay the same level of tax.

I don't believe it is possible to claim a reduction on this tax if you, or any tourists, are not able to stay in the property due to Covid or any other restrictions. It is just one of umpteen financial problems caused by the current situation.

The only way to avoid paying this tax on a property that is not your main residence is to remove the furniture and declare that it is not inhabited.
Honi soit qui peu y boit
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