Do you own real estate abroad (apartment, house, company similar to a French SCI (société civile immobilière), etc.)?

The rents must also be declared in France!

This is not widely known, and my clients are often surprised that they ALSO have to declare their foreign rental income in France.

Indeed, all tax residents of France must declare their foreign rental income every year.

But, good news, this income is often not taxable in France: YES, it must be declared, that is, you must fill in certain boxes on your returns, but NO, it is not taxable in France.

We will look at this in detail just below.

YES, You Must Declare Your Foreign Rental Income in France!

Of course, this applies only if you are a tax resident of France.

How do you declare it? In fact, it is the usual process, with one additional form, the 2047.

Depending on the case, foreign rental income either appears on the 2044, like French rental income, or appears on the 2044 AND the 2047, or appears only on the 2047.

This may seem complicated, so let us get straight down to specifics.

Case 1: The Country from Which the Rental Income Arises Does NOT Have a Tax Treaty with France (check the list of tax treaties to see whether your country has a treaty)

Well, it is very simple: you file exactly the same returns as for French rental income. You therefore use the 2044 if you are under the actual-expenses regime (régime réel), or simply the 2042 for the micro regime (micro-foncier). If it is furnished rental, you use the 2042 C PRO.

In short, it is as if it were ordinary French rental income. Big downside: double taxation. If you have paid tax abroad on your rents, well, there will be a second layer in France!

Rest assured, France has signed many tax treaties, so such cases are rare.

Case 2: The Country from Which the Rental Income Arises HAS a Tax Treaty with France (check the list of tax treaties to see whether your country has a treaty)

This is where it gets a little more technical.

Broadly speaking, there are two things to remember: you will have to declare your foreign rental income but, good news, there will be no tax in France.

However, there is a technical subtlety: does the tax treaty say that the rental income is exempt in France, or does it say that there is a tax credit in France?

In both cases, there is no (or almost no) tax in France, but the way of declaring changes.

a. The Tax Treaty Says That the Rental Income Is Exempt in France

Here is how to proceed:

Form 2047: you fill in section 8 “EXEMPT INCOME TAKEN INTO ACCOUNT FOR CALCULATING THE EFFECTIVE RATE” (REVENUS EXONÉRÉS RETENUS POUR LE CALCUL DU TAUX EFFECTIF)

Form 2042 C: you fill in box 8TI

b. The Tax Treaty Says That the Rental Income Gives Entitlement to a Tax Credit in France

Here, it is a little more complicated technically.

You will have to fill in the 2044 (if under the actual-expenses regime) or the 2042 (if under the micro regime) or the 2042 C PRO (if furnished rental).

But also:

Form 2047: section 4 “RENTAL INCOME TAXABLE IN FRANCE” (REVENUS FONCIERS IMPOSABLES EN FRANCE)

AND section 6 “TAXABLE INCOME GIVING ENTITLEMENT TO A TAX CREDIT EQUAL TO THE FRENCH TAX” (REVENUS IMPOSABLES OUVRANT DROIT À UN CRÉDIT D’IMPÔT ÉGAL À L’IMPÔT FRANÇAIS)

Form 2042 C: you fill in box 8TK

If You Have Foreign Income, You May Also, and Often Do, Have a Bank Account Abroad

Your foreign accounts must be declared every year using form 3916/3916-bis.

Please note: increasingly, the French tax authorities are informed, every year, of the existence of your foreign accounts, with a great deal of detailed information such as the balance, the amount of income received, etc.

And What Should I Do When I Sell My Foreign Property?

You will, in principle, have to complete form 2048 IMM within one month of the sale.

There are exceptions which, thanks to tax treaties, mean that you pay nothing and declare nothing in France.

There are also exemption mechanisms, subject to certain conditions, in the case of the first sale of a second home for the purpose of buying your main residence.