Retire in 2022 - maybe in France

[oiseux]

Hi All,

I did not check US Real Estate; but I now EU Real Estate and REIT type investments are subject to the French wealth tax on real estate (IFI).

It only applies to real estate above 1.3 million euros and you can deduct ~30% of your primary residence. Don't quote me on the 30%; but this was I believe the amount last I checked.

Cheers,

Timo

It is 30%. And US is specifically covered in the US-France tax treaty, and is given a five year exemption.

However, there are a bunch of conditions and structures that can reduce the impact, and a limit based on total taxes as percent of income. That I'm not versed on, as for our level of exposure is not that complex.

 

[MikeyInMarin]

Wow. More good info.

I realized I made a mistake in the title: I plan to retire in 2023. Also, for some reason I stopped getting emails when replies were posted back in January, so I just saw the new replies.

2 weeks ago I used the immigration application website:

https://france-visas.gouv.fr/en/web/france-visas/welcome-page

to see how the process works. I didn’t see any residency types of visa, the closest thing was a long-term tourist visa. Am I missing something?

 

[oiseux]

Wow. More good info.

I realized I made a mistake in the title: I plan to retire in 2023. Also, for some reason I stopped getting emails when replies were posted back in January, so I just saw the new replies.

2 weeks ago I used the immigration application website:

https://france-visas.gouv.fr/en/web/france-visas/welcome-page

to see how the process works. I didn’t see any residency types of visa, the closest thing was a long-term tourist visa. Am I missing something?

You are essentially applying for the long stay visitor visa for inactive people and thus promise not to seek work and have sufficient resources (among other criteria). You'll want to ensure it is not the 6 month type but the 12 month type. After a year, it is renewable in France; it serves as a residence permit after OFII validation.

 

[pdxgal]

The French Wealth Tax now only applies to real estate holdings. So it should not be a major issue unless you have more than $1 million euros of real estate.

A home in San Rafael CA is most likely worth $1M euros or more. Though I believe there's an exemption for part of the value of one's primary residence.

Like OP I have long had a goal of living in France in retirement, so am doing similar research. This fall I plan to go to Lyon for a six month advanced language course (I'm already fluent but there's always room for improvement, and it will be good intellectual stimulation). While there I intend to meet with local experts to get more details about how long term residency could work, given my finances. I will try to remember to report back here!

FWIW some cost of living in France is cheaper than the US. So even if one has to pay the wealth tax it could be offset by potential savings. I imagine that the rent from OP's house could potentially cover both renting a nice place in France (though not Paris) and the wealth tax.

Perhaps if one owns property in France it would be easier to get a long term visa? Then you'd have a valid reason for wanting to live there as a resident.

My ex currently spends half his time in France, staying in rented apartments, but is limited to 3 months there, then 3 months here. He tried to get a long term visa but was turned down since he didn't have any compelling reason.

Thankfully I got Irish citizenship years ago, although if there's a "Frexit" it won't help.

 

[pdxgal]

It includes all types of real estate, including land and shares/companies/other financial instruments focused on real estate. There are exemptions for property held for commercial activity (i.e, you are a doctor and it is your sole practice) but not unfurnished rentals (and furnished rentals where it is not deemed a qualifying, registered professional activity). There are reductions in place for primary residences and unfurnished rentals. And there is a cap as well, and certain structures that still benefit from exemptions.



Link: Official French Explanation and continuing here
Link: High Level Overview in English from Notaires site

The French have loopholes just like in the USA

@Oiseaux, do you know how US real estate held in revocable Trusts is handled for purposes of the wealth tax? I didn't see info on that on the linked pages (though maybe I missed it).

UPDATE: Found some info. Looks like Trusts are included:
https://myfrenchtaxes.com/trusts-in-france-is-your-trust-french-connected/

 

[NW-Bound]

We lived in France (Paris) for many years. As non-legal residents it was extremely difficult to get a bank account or even a land-line phone. This was 20 years ago so things may have changed. There is also a form required to show that you are not going to be taking a job from a French national...

It's still difficult!

I read the blog of a couple who retired early to do full-time RV'ing in the US. Then, they got bored and moved to southern France, somewhere north of the Pyrenees if I remember it right.

The wife is Swedish, hence an EU resident. The husband then should have no problem becoming a resident. Even so, it took them a long time to open a bank account, and to get a French cell phone number. There was just so much red tape.

Their blog is here: https://www.wheelingit.us/.


PS. Pre retirement, I used to think of living for a couple of years in Provence. Yes, I was lured by reading books by Peter Mayle.

But now, I realize that I will miss my home. I have yet to stay in France for the limit of 90 days, let alone for longer.

 

[MikeyInMarin]

Hi pdxgal.

My home is likely worth less than the average SFR in San Rafael. It is small (1200 sf), and sort of, um, unique. I always wondered how I would value it without actually putting it on the market.

I just setup a RLT last year, and my home is in that (of course). It never crossed my mind that the title status of a US property would impact the wealth tax.

Also, like pdxgal, I am visiting Nice for 2 weeks in May - to scope things out a bit. I debated whether it made sense to try to open a French bank account but I think I’ll defer that pain until it is relevant.

 

[bigreader]

Bank Accounts

I live in the US, am a EU-US citizen. While researching EU bank accounts, found a service called Wise (once called Transferwise). I now have a free virtual bank account in Europe that functions just like a "real" account. I can receive and transfer money in various currencies with very good exchange rates. It might be a solution for you.

br

 

[Alan]

I live in the US, am a EU-US citizen. While researching EU bank accounts, found a service called Wise (once called Transferwise). I now have a free virtual bank account in Europe that functions just like a "real" account. I can receive and transfer money in various currencies with very good exchange rates. It might be a solution for you.

br

My wife and I also have a Wise account, which is also linked to our US Vanguard accounts, and it works great. We are dual US-UK citizens living in England.

 

[oiseux]

It is tougher post FATCA to open a bank account in France. There is still a strong preference for a French or EU B&M bank and having a carte bancaire (carte bleu/debit card) makes everything from parking meters to small purchases so much easier. We used a property consultant who made an introduction to the bank, and it was super easy.

It is interesting to hear someone get rejected for intent. Was it on the long stay visitor visa? I'm not aware of anyone getting rejected for intent, as long as you have sufficient means to support yourself and declare you do not intend to seek work (i.e., FIRED).

Regarding the wealth tax, there is a waiver for five years as noted. And as you found out, trusts are not recognized. If you are close to getting to the threshold, you can take out a mortgage for the French place. The rates are incredibly low, still, like 1.6%. (This is easier if you are under 50 to 55 and still employed, btw (pre FIRE)).

 

[pdxgal]

It is interesting to hear someone get rejected for intent. Was it on the long stay visitor visa? I'm not aware of anyone getting rejected for intent, as long as you have sufficient means to support yourself and declare you do not intend to seek work (i.e., FIRED).

Well, the ex only spends half the year in France, He just wanted to be there *continuously* for six months, rather than the 3 months there, 3 months here. That wasn't a compelling enough reason for the French to grant him a long stay visitor visa. He has enough money (he FIREd at 58) and even bought expat health insurance, so that wasn't the issue.

 

[timo007]

Hi All,

I hold dual French / USA citizenship.

While I was forced to close several bank accounts due to my USA citizenship; I have been very happy with Fortuneo (online French bank). They provide me with a free debit card and have proven very reliable. I also keep an HSBC account; as it was easier to open with my HSBC account in the United States and HSBC USA customer service can transfer you for free to HSBC France. HSBC France also have an english language customer service.

I definitely agree that wise is a great service for transferring money.

I agree that the cost of living is much lower in France. Property taxes are much lower than Texas and the price of food and general services seems to be much lower (think mobile phone, internet, TV, etc.). The price of electricity is much higher though as is the price of fuel. That said, the French have smaller apartments / houses and drive more fuel efficient cars.

Yes the administration can be a bit burdensome; but if you are retired; I guess you have the time to manage.

For us retirement in France is going to be about the food, the wine, the sea, the mountains, and exploring Europe.

If ever folks have questions on living in France; I am happy to see if I can help via PM.

Cheers,

Timo

 

[MikeyInMarin]

Hi oiseux,

I appreciate your help, but wanted to wait until I got enough information to ask intelligent questions. I’d like to talk. Can we setup something ?

Thanks again

 

[Hank]

You could easily swap your house with a French person's and probably get a dynamite place. San Rafael is so nice. I wouldn't give it up either.



It will take you a while to a get a EURO visa to stay anyway. On the other hand, you are at the age where you are not a concern for taking a French job so it might be easier. Anyway, emmigation is a hassle so check it out fully before you leap into it. You could just go stay there for a long time and see if it's a fit.


France has good healthcare.....so there's that.

 

[oiseux]

Hi oiseux,

I appreciate your help, but wanted to wait until I got enough information to ask intelligent questions. I’d like to talk. Can we setup something ?

Thanks again

I didn't see this til now... feel free to message me when you have more questions.