Deadline day looms to claim tax on French second homes

Second-home owners looking to sell property in France have been spared punishing capital gains taxes after lawmakers reinterpreted post-Brexit rules last year.

But Britons who sold property in France in 2021 and early 2022 have just under two months to make a claim – which could result in a 10pc rebate.

Under an interpretation of France’s tax code imposed after the UK left the EU, British expats and second-home owners were liable to pay 17.2pc on income from property sales and earnings. Nationals from other EU member states are exempt from paying the full rate, instead handing French tax officials just 7.5pc on capital gains.

However, following the Brexit agreement on Jan 1 2021 British nationals lost eligibility for the lower rate and instead were forced to pay full tax on capital gains. But now they could be in line for a rebate of 10pc on their income.

The deadline to lodge a claim is Dec 31 2023 for property sales completed and income earned during 2021 and the same date in 2024 for sales and income between the start of January and February 2022.

Deborah Vaysse, a French property lawyer of law firm Furley Page, said that the move was “good news” for British citizens. “French tax authorities have updated their interpretation of the EU and UK Trade and Cooperation Agreement regarding the effects of Brexit and have decided that the reduced social charge rate of 7.5pc should also be applied to UK taxpayers,” she said.

However, time is running out to claw back money on capital gains made in France after the government’s tax authority updated its website last year to reflect the change in British expats’ liability. Ms Vaysse added that some could have missed the news, which was not widely publicised, and may have dismissed letters by the Direction générale des Finances publiques (DGFIP) – the French tax office – informing them of their eligibility as scams.

To qualify for the capital gains rebate you need to have been a British tax resident and paid National Insurance contributions when you sold your property, or earned income, in France from Jan 1 2021 to the first day of March 2022.

To lodge a claim on your capital gains taxes paid in France you will need to write a letter in French to DGFIP requesting a rebate. This must include a scan of your British passport, as well as proof that you were paying National Insurance in the UK when you sold property or earned income when you paid France’s higher capital gains tax.