Legal entities that own real estate in France are subject to a tax of 3% on the value of their properties. This tax on the fair market value of real estate was introduced by the 1983 Finance Law with the objective of ensuring visibility of the chains of ownership of properties by French and foreign entities, allowing the identification of shareholders and thereby verifying the proper application of the Wealth Tax (ISF), now replaced by the Real Estate Wealth Tax (IFI).
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BSPCE (bons de souscription d’actions de parts de créateurs d’entreprises) have been implemented as a management package tool to interest executives and directors of young companies in value creation under an attractive tax and social regime. In many situations, they have replaced stock options as an incentive tool.
To be subject to income tax in France, individuals must have their tax residence in France.
The notion of tax domicile is independent of civil domicile and nationality. Thus, a French person can be considered as not domiciled in France while a foreigner is.
The real estate capital gain is the difference between the sale price and the purchase price (or the value declared in the deed of gift or inheritance). Before deciding to sell a property, it is best to know what happens to the capital gain realized.