Guadeloupe: Living There - Tax Issues

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French residents are taxed on their global income.

French residents are taxed on a household basis, at progressive rates. The mode of calculation is somewhat strange, and emphasizes the familial nature of French society. The household’s net taxable income is divided by the number of family members, calculated according to the so-called ‘family coefficient rules’ (e.g., a two parent family with two dependent children would result in the gross family income being divided by 3). The figure arrived at is taxed at the scale rates. Then the resulting amount is re-multiplied by whatever number was arrived at.

The following income tax rates apply for calendar year 2006:

Taxpayers whose income after deducting professional expenses does not exceed €7,510 are exempt from income tax. For taxpayers over 65, the limit it set at €8,500.

Tax Incentives

Special tax offsets are available for individuals investing in the French overseas departments and territories, including the ‘Loi Girardin,’ which concerns new or remodeled dwellings.

Beneficiaries must be tax-resident in France.

Loi Girardin – for individuals. Investors must either:

• live the property as their main home for at least five years after purchase, or
• rent out for five years after purchase, or
• invest in a company or society putting up buildings in the overseas departments and territories for rental for at least five years.

The maximum incentive is 64% of the building’s cost, and can be deducted from individuals’ tax payments:

• Over five years for an investment in a rental property
• Over ten years for buying one’s principal home

The tax reduction is limited to €1,953 per sq. m (2005), and amounts to:

• 25% of the cost of a dwelling intended to be the buyers’ home
• 40% of the cost of a dwelling intended for rent on the free market
• 50% of the cost of a dwelling intended for rent to tenants for less than certain higher limits.
• plus 10% if the dwelling is in a town
• plus 4% if the swelling is equipped with renewable energy systems
• To a maximum of 64% of the building’s cost.

Loi Paul

Companies domiciled in France which pay corporation tax can recoup 100% of investments in the overseas departments and territories as tax rebate, if they invest in new productive investments lasting at least five years in industry, fishing, the hosterly business, tourism, new energy sources, audiovisual information services, BTP, du transport et de l'artisanat. This can include property investments if, again, they are subject to a rental contract of at least five years.

Guadeloupe - more data and information

• Lawyers (attorneys) with property law practices in Guadeloupe

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