Brexit and real estate: Britons who own property in France face new rules

Since January 1, 2021, Brexit has profoundly changed the rules applicable to British nationals owning real estate in France. Whether you are already a property owner or considering buying, it is essential to understand the new legal, tax and administrative constraints. This article guides you through the main changes and gives you practical advice to secure your assets.

1. Right of residence and tax residence

British nationals no longer benefit from free movement within the EU. To stay more than 90 days in France, you must now obtain a residence permit (withdrawal agreement residence card or long-stay visa). Owning real estate does not automatically confer the right to reside in France. If you are a French tax resident, you are taxed on your worldwide income. Conversely, non-residents are only taxed in France on their French-source income

2. Taxation of ownership and transfer

• Property tax and housing tax : unchanged, but beware of new rules on second homes (possible increase in certain high-demand areas).
• Real estate wealth tax (IFI) : if you are a French tax resident, your net taxable real estate assets (excluding debt) are subject to the IFI from 1.3 million euros. Non-residents are subject to it only on their properties located in France.
• Capital gains on real estate : in case of sale, non-residents (outside the EU) are subject to a 19% levy (plus 17.2% social contributions) on capital gains, with an allowance for holding period. Since Brexit, Britons are considered third-country nationals, unless they reside in an EEA member state or Switzerland.
• Inheritance rights : the rules differ depending on whether the deceased was a French tax resident or not. For non-residents, assets located in France are subject to French inheritance tax, with limited allowances (€1,594 for a non-resident child). It is crucial to anticipate through donations or appropriate legal structures.

3. Status of non-European resident

As a third-country national, you must comply with entry and residence formalities. For stays of less than 90 days, a passport is sufficient. Beyond that, a visa or residence permit is mandatory. Owning real estate can facilitate obtaining a long-stay visa, but it does not guarantee obtaining a residence card. Remember to check your situation with the consular authorities.

4. Current contracts and new acquisitions

Lease, construction or sale contracts concluded before Brexit remain valid, but clauses may be affected by the change of status. For any new acquisition, it is recommended to:

• Faire appel à un notaire français expert dans les transactions internationales.
• Include a termination clause in case of refusal of visa or residence permit.
• Check the tax implications in your country of residence (United Kingdom) to avoid double taxation.

5. Practical tips to secure your investment

• Update your administrative situation: apply for a residence permit if you reside in France for more than 90 days.
• Optimize your inheritance tax: consider a gift-splitting or creating a family SCI.
• Check your home insurance: some policies may be cancelled if you are no longer a resident of the EU.
• Consultez un avocat expert en droit immobilier international pour un audit personnalisé.

Brexit has created new obligations for British owners in France. Do not let your real estate investment become a source of complications. Tailored legal support will allow you to navigate this new regulatory framework serenely.

Would you like personalized advice? Maître Cécile Zakine, attorney at the Paris Bar and Doctor of Law, receives you in her office or by videoconference to analyze your situation and propose tailored solutions. Book an appointment now.