Despite the recent introduction of the 20% tax on second homes in France, those property owners who decide to live and work in the country can still benefit from a world of tax advantages, as a recent investigation from the Daily Telegraph concludes.
The British national newspaper uncovered some interesting comparisons between taxes on wealth and income in the UK versus France, meaning despite high rates of property tax, those who relocate stand to gain considerable financial advantages. Whilst the top tax bracket in France is 9 per cent lower than that of the UK, and its lowest bracket a tiny 5.5 per cent of all earnings, income tax agreements between the two countries also mean that tax paid in the UK on some forms of earnings can be credited to your French tax bill.
"France gives a credit for UK tax paid on some forms of income, such as dividends, where these are payable in both countries", Bill Blevins of European financial advisers Blevins Franks told the Telegraph. "UK state pensions are also index-linked for French residents."
Whilst the French government plans to introduce the extra tax on second homes by the beginning of next year, they have at the same time increased the threshold for wealth tax from 790,000 euros to 1.3 million. This means those planning to purchase a French home, relocate and become resident will be exempt from wealth tax if their total worldwide assets are under this amount.
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