Our Company
Call Us+44 (0)330 057 0292
Get the lowdown on your liability—no surprises, just clarity! Americans who buy a property in France must pay income tax in the US on any income generated from that property. This is because the US has a citizenship-based taxation system, which means that US citizens and permanent residents are taxed on their worldwide income, regardless of where they live.
Contact UsRental income
Capital gains from the sale of the property
Any other income generated from the property, such as income from a vacation rental business
Americans who own property in France must report their income from that property on their annual US tax return. They may be able to reduce their US tax liability by claiming the Foreign Earned Income Exclusion (FEIE) or the Foreign Tax Credit, but they will still be required to report their income to the IRS. It is important to note that the US and France have a tax treaty in place, which is designed to avoid double taxation. This means that Americans who pay income tax on their French property in France will not be taxed on the same income again in the US.
The progressive IFI scale applies to the net taxable value of real estate assets exceeding €800,000,even though the threshold for liability is set at €1,300,000.
| Net Taxable Value (€) | IFI Rate |
|---|---|
| Up to 800,000 | 0% |
| 800,001 – 1,300,000 | 0.50% (With Discount) |
| 1,300,001 – 2,570,000 | 0.70% |
| 2,570,001 – 5,000,000 | 1.00% |
| 5,000,001 – 10,000,000 | 1.25% |
| Over 10,000,000 | 1.50% |
A discount ('décote') is applied for estates between €1.3 million and €1.4 million, calculated as:€17,500 – (1.25% × net taxable value).
En