Non-residents selling property in France must, subject to a limited number of exemptions, appoint a fiscal representative. UK nationals have previously benefitted from a blanket exemption but this has been withdrawn following the UK’s departure from the EU.
The fiscal representative’s role is to verify that the correct amount of tax has been paid. Their costs can typically range from 0.4 to 1% of the property value. Under the French tax system, the fiscal representative assumes liability for any miscalculation of tax, which leads the representatives to produce very conservative calculations. For example, a fiscal representative might not always deduct all allowable capital expenses.
Many who have encountered this requirement have complained of an opaque process and difficulties finding fiscal representatives holding the required qualifications. Some notaires appoint a representative without discussing it with clients, which prevents a client from being able to negotiate on price or scrutinise the service being given.
As mentioned above, certain exemptions still exist and it is important to have a thorough understanding of the French tax system to avoid overpayment. As the founding member of Law Exchange International, an international network of law firms, Hewitsons is well placed to assist you with these matters. In the meantime, keeping careful records of works carried out and payments made in respect of the property is a good start. For further advice, please contact one of our Solicitors below.
Kerri Woodrow on 01604 463350 or click here to email Kerri.
Bernadette O'Reilly on 01223 532763 or click here to email Bernadette.