From January 1, 2021, the British, who own real estate in France, will be liable for social security contributions.
In less than a week, the United Kingdom will officially leave the European Union. Since 2015, fewer and fewer British people have a pied-à-terre in France. And it is not Brexit that risks reversing the trend, quite the contrary.
Brits who own real estate in France are wondering if it is in their interest to return to the UK. “Some have a hard time with Brexit and have the impression of being badly perceived when they return to France“, Emphasizes a connoisseur of the real estate market. Others, on the contrary, consider “apply for French nationality to continue to reside in France under conditions similar to those before Brexit», Affirms Me Laurence Leguil, secretary of the office of the Superior Council of the Notariat.
Concretely, “British people wishing to reside in France and above all to move freely between the United Kingdom and France will have to apply for a residence permit like foreigners from third countries. Before Brexit, their European status allowed them to move freely between the two countries», Explains the notary.
»READ ALSO – Real estate: Creuse is the most popular with foreigners
This crucial life change is indeed dictated by the new Brexit deal. From January 1, 2021, the British will now be subject to social security contributions (17.2%), like the French. In two cases: if they receive income from the rental of goods held in France or if they realize a capital gain on their sale. Before that date, the British were exempt from it because of their status of dependent non-resident of the European Union.
As soon as they are no longer affected by this regulation on equivalence in social legislation, they lose this exemption. “Taxation will therefore be higher than before in the event of a property sale subject to capital gain ”, underlines Me Laurence Leguil. Unless they’ve owned their property for over … 30 years. Which is not the case. “The Germans keep their property in France the longest, specifies Me Laurence Leguil. 70% of them resell them after at least 15 years. The English keep them less long»
»READ ALSO – Real estate: the British are the most expensive buyers in Paris
In short, it is not good to own real estate in France when you are British. Which explains why many sold their property in the last five years before Brexit was official. Those who stayed in France simply preferred to change their destination and opted for regions and less priced properties to limit their capital gain in the event of sale. And therefore limit the cost of taxation.