If you own a French property and are looking to sell, you may have been informed that you need to appoint a fiscal representative in order to carry out the sale. But, what exactly is a fiscal representative, which French homeowners need one, and what are the associated costs? Here’s what you need to know.
What is a Fiscal Representative in France?
A fiscal representative (représentant fiscal) is a French tax agent that supports foreign companies, business owners, and individuals with financial assets in France to fulfil their tax duties in France. Fiscal representatives are legally required by any non-EU foreign business carrying out operations in France that are subject to VAT. They are also legally required for non-EU foreigners carrying out certain tax-applicable financial transactions, including the sale of a French property.
The role of the fiscal representative is to make sure that the relevant taxes are paid on behalf of the business or individual. When a French property or second home over the value of €150,000 is sold in France, the fiscal representative will ensure that the applicable rate of French capital gains tax is paid by the foreign seller.
Do I Need a Fiscal Representative to Sell My French Property?
If you are the foreign owner of French property and you are resident in a non-EU or EEA country (for example, the United States or Australia), it is a legal requirement in France to appoint a fiscal representative when selling a property in France over the value of €150,000. Since Brexit, this rule also applies to UK citizens resident in the UK or another non-EU country.
The appointment of a fiscal representative is in addition to the notaire (who is also legally required to carry out the sale of a property), and the associated fees will be charged in addition to the notaire’s fees (which are paid by the buyer) and payable by the seller. While the role of the notaire and the fiscal representative do somewhat overlap, both remain legal requirements for non-EU sellers.
Read the official guidelines here.
How Can I Avoid Using a Fiscal Representative in France?
If you are not resident in France and are selling a French property, there are only four ways to avoid using a fiscal representative:
- You are resident in another EU country or in a country party to the Agreement on the European Economic Area (EEA), which has signed a mutual administrative assistance agreement with France (i.e. Iceland and Norway).
- Your property sells for less than €150,000.
- If your property is exempt from capital gains on both income tax and social levies owing to the duration of ownership of the property – in other words, you have owned the property for more than 30 years.
- If you are exempt from capital gains tax for some other reason.
If you do not meet one of the three requirements outlined above, there is no way to avoid the legal requirement to use a fiscal representative.
How Much Does a Fiscal Representative Cost?
The fees of a fiscal representative are calculated based on the sale amount and, therefore, the amount of capital gains tax payable on the property. Calculations can be complicated and difficult to predict, but you should expect to pay between 0.4% to 1% of the sale price of the property. This fee will be deducted from your capital gains.
How Do I Appoint a Fiscal Representative in France?
You are free to appoint any fiscal representative that you choose, as long as you use an accredited company. Many sellers opt to follow the advice of their notaire when choosing a fiscal representative, and the notaire is able to appoint one on your behalf.
However, as fiscal representatives are private companies (as opposed to notaires who are appointed by the state and therefore cannot compete in terms of price), it can be beneficial to seek the advice of multiple fiscal representatives before making your decision.
You should check that the company is accredited for non-resident capital gains tax (not just VAT as is the case for some companies), ask for details of what fees they charge (and don’t be afraid to negotiate, especially if you notice differences between agents), and, if applicable, ask for details of capital gains tax deductions (for example, on building works). If your situation is complicated with multiple possible deductions, you will want to find a fiscal representative with the knowledge and experience to aid you with this.
Are You Ready to Sell Your French Property?
Whether you choose to sell your French property privately or through an estate agent, need expert advice on the legal procedure or capital gains tax, or want to brush up on your knowledge of buying and selling in France — FrenchEntrée is hear to help! Our Essential Reading guides are the best place to start.
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