Le Petit Saint-Germain is a newly renovated apartment by the illustrious Interior Architect Martine di Mattéo located in a classic building on one of the most desirable streets in this much sought-after part of Paris. From the cobblestoned courtyard of the building, one mounts a single flight of stairs to reach this model of efficient design and planning – it may be small but it’s bright, spacious and you will find all that you need to make your stay in Paris comfortable and relaxing.
FREE one-hour consultation! Guests of Parler Paris Apartments or Parler Nice Apartments who are considering the purchase of their own "pied-à-terre" for pleasure and profit, can take advantage of a free one-hour consultation while enjoying the apartment in the City of Light or on the Riviera. Simply complete the request form to book your consultation.
Bonjour French Property Insider Subscriber,
I stand to be corrected. If you read last week's FPI "How to Pay Your Property Taxes (and other French Taxes)," then please note an important correction -- thanks to one of our loyal readers who is a retired U.S. tax attorney and owns an apartment in Paris where he lives part-time.
The Congressional conference committee
In the nouvellettre® I posed the question: “Are the taxes that are paid in France deductible on your US return?” The answer was “Yes!!,” but the answer and the link to an IRS explanation referred to a “credit” for foreign income taxes, which according to our reader, has nothing to do with deductions for foreign property taxes.
According to our reader, the new tax law Congress passed and Donald Trump signed a few weeks ago, and that went into effect this year, allows tax deductions only for state, local and foreign property taxes incurred in a business or an income-producing activity. This means that if your property in France generates a rental income and that income is reported on your U.S. tax return, then the deductions may still be possible. For secondary homes that are not rented out, or considered investment properties, the deduction for taxes is capped at $10,000 per year, and that’s only for U.S. state and local income or property taxes. The Congressional conference committee report specifically says: “Foreign real property taxes may not be deducted under this exception.” This text can be found on pages 80 and 81.
So, the answer to the question would have been "yes" for last year but not for 2018 and going forward through 2025. This is considered a “temporary” provision that could be extended or repealed or...
The IRS explains the rules for deducting expenses for property that is rented all or part of the time. See irs.gov/taxtopics/tc415 for detailed information.
Our reader explained: "It includes things like dividing expenses between “rental" and “personal" use. It’s probably more “on point” for what this column says is your target audience (“non-resident clients who have a property in France”) than the one you had included on credits for foreign income taxes. It doesn’t specifically refer to the “foreign” (non-USA) property tax issue - i.e., that the “personal” portion of foreign property taxes cannot be deducted - but it has been updated recently (mid-January) so seems generally okay under current law."
Reality check: The French tax authorities will tell you that if you rent a property in France, France expects you to report your rental income in France. The rules in France on income and the taxes due, of course, differ. If you are not tax resident in France, then the question I ask is, "how will France know?" The truth is they won't unless you report it. The IRS isn't going to tell you that you should be paying your tax in France instead of the U.S.! If you are renting your property short-term in Paris contrary to the current rules, then if you report your rental income in France, you will not be able to deny your short-term rentals. I am certainly not suggesting tax evasion, but make these notes only to have a perspective. You then have to make your own decisions on how you wish to report your income and expenses against that income.
Disclaimer: I am not a tax attorney nor expert in these issues and cannot provide definitive tax advice. This is only designed to inform you and help you assess your own personal situations. I recommend you consult with your U.S. and French tax attorneys to be absolutely certain and do what makes you feel most comfortable!
P.S. Through our association with a variety of professional, we are happy to be able to recommend their assistance to you for your wealth and tax issues related to living and owning property in France. Please see our Global Money Services page.
The ADRIAN LEEDS GROUP Apartments
Welcome to your home in Paris. Home is how you will feel in a private apartment in Paris that has the "seal of approval" from ALG, Paris Sharing and me, Adrian Leeds.
This very well equipped studio apartment, decorated in subtle grey and celadon green, was fully renovated in 2011 and is ready to facilitate your escape. The focal point of this professionally designed space is the new and comfortable queen-sized bed that can be made up as twins. Topped by a magnificent oval mirror, it is surrounded by custom cabinetry that provides lots of storage as well as a desk at which you can pen your memoirs.
Copyright 2018 Adrian Leeds® Adrian Leeds Group® adrianleeds.com PAdrian Leeds® is a registered trademark in France. INPI: March 10, 2006, #063416238. Adrian Leeds Group® is a registered trademark in France. INPI: December 22, 2014, # 14/4144068. Anyone using these brand names or any kind of advertising without permission may be prosecuted. AdrianLeeds.com, AdrianLeedsGroup.com and AdrianLeedsEnterprises.com are reserved domains for exclusive use of Adrian Leeds® and Adrian Leeds Group®.