France tax treaty Germany : your property in France

In France only (article 3). Germany excludes these rents from its tax base (article 20 § 1 a).

Not for a property held directly. The treaty would allow it, but German law removes the progression clause for rents from a property located in the EU (§ 32 b EStG).

In principle no, according to the European Consumer Centre. The purchase, the sale and the capital gain, however, must be declared. Have your case confirmed by your Steuerberater.

No. French income is outside the German base, and the § 32 b EStG exception also applies to losses.

No if you hold the property directly: it is excluded from the base (article 20 § 1 a). It may only count for the rate if you sell within 10 years. A capital gain on SCI shares follows another rule: Germany may tax it and credits the French tax (article 20 § 1 c).

Not without prior calculation. The SCI deprives you of the €150,000 exemption on resale, moves the capital gain on shares onto the German tax credit method and adds a declaration to the Finanzamt. Its classification in Germany is not confirmed by any official text that we have found. The treaty’s anti-abuse clause also targets arrangements where the tax advantage is one of the principal purposes. Have the structure validated by a Steuerberater before signing.

No. Germany is a member of the EU and linked to France by the required administrative assistance treaties.

Yes if the net value of your French real estate exceeds €1.3m on 1 January (article 19). Germany does not levy wealth tax.

7.5% if you are covered by German social security and not dependent on any French scheme. Remember to tick box 8SH or 8SI. Otherwise, 17.2% on unfurnished rentals and on the capital gain, 18.6% on furnished rentals.

France taxes the property (article 5 of the 2006 treaty). Germany may also tax it, but it deducts French tax (article 11 § 2 a). You bear in practice the higher of the two. With a German allowance of €400,000 per child, French tax is often the only one due on a property of average value.

Yes. Unlike other treaties, the 2006 one also covers gifts. France taxes the property and Germany credits the French tax. Watch the five-year period of § 21 ErbStG if the two taxes are out of step.