Buying property in France while living in the UK is increasingly popular with private investors and business owners alike. A resilient market, strong legal protections and historically attractive fixed-rate loans make France an appealing destination—provided you select the right structure, anticipate the tax landscape and arrange suitable financing. This guide, written by a lawyer, sets out the post-Brexit best practices that will help you secure cross-border deals and protect your wealth.
Choosing the Right Ownership Structure
Direct ownership: straightforward yet tax-exposed
- Pros: minimal formalities, no incorporation costs.
- Cons: potential exposure to the French real estate wealth tax (IFI) and high inheritance duties; unlimited personal liability.
SCI (French “Société Civile Immobilière”): flexibility and estate planning
- Collective management with bespoke bylaws.
- Corporate-tax option shifts IFI to the company level, not the shareholder.
- Annual accounts and additional formalities required.
English company (LTD): corporate agility, post-Brexit vigilance
- Greater confidentiality and familiar corporate governance.
- Possible double taxation without careful treaty analysis.
- Enhanced transparency via France’s beneficial-ownership register.
Tip: have your estate and succession goals audited before adopting a hybrid set-up (e.g. an SCI owned by an LTD).
IFI: What UK Residents Must Know
- Threshold: net French real-estate assets over €1.3 million.
- Valuation date: 1 January of the tax year.
Reducing the taxable base
- Strategic borrowing lowers the net value.
- SCI taxed under the corporate regime keeps the property outside the shareholder’s IFI scope.
- Luxembourg life-insurance wrappers can hold SCI shares for efficient succession planning.
Capital Gains Tax: Plan the Exit Early
| Holding period | 19 % tax | 17.2 % social charges |
|---|---|---|
| 0–5 years | 100 % | 100 % |
| 6–21 years | Progressive relief | Progressive relief |
| ≥ 22 years | Fully exempt | 9 % still due |
| ≥ 30 years | Fully exempt | Fully exempt |
Key points
- Main-residence exemption does not apply to UK residents.
- The €150 000 allowance is limited to former French tax residents (≥ 2 years).
- Planning the sale when you buy limits nasty surprises later.
Cross-Border Financing: Optimize Rates and Currencies
Borrowing in France
- Fixed rates often lower than in the UK.
- French mortgage security required.
- Interest deductible against French rental income.
Borrowing in the UK
- Easier access to tailored private-bank lending.
- GBP/EUR currency risk on rents and capital repayments.
- Interest typically not deductible in France without a permanent establishment.
Hybrid structures to consider
- SCI under corporate tax funded by an LTD: intra-group dividend flows.
- Hedging clauses lock in exchange rates over the loan term.
Conclusion
Investing in French property from the UK remains attractive if you:
- Choose the ownership structure aligned with your estate goals.
- Master IFI exposure and capital-gains taxation.
- Build financing that matches your cash flow and currency profile.
Tailored legal and tax advice is essential to safeguard every phase of your cross-border investment.
This guide provides general information and does not constitute personalised legal advice.
