French Polynesia: Taxes and Costs

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French Polynesia has no income tax, but plenty of other taxes

Transactions Tax (impĂ´t sur les transactions) Property rentals of any description are considered to be receipts and come under the Service Providers and Professionals heading of the Transactions Tax. In terms of leasing property, this tax is levied on the gross rent at the following rates:

Property Tax (impôt foncier sur les propriétés bâties)

Buildings are subject to property tax at a flat rate of 10%. A deduction of 25% of the property’s rental value is given to all owners, which means that the tax is effectively levied on 75% of the property’s rental value.

Municipalities may levy 50% surtax on the property tax, which makes the maximum effective tax rate at 15%. New buildings benefit from 5 years’ tax exemption.

Tax Incentives

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

Loi Girardin – for Individuals

• 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.

Capital Gains Tax

Capital gains earned from selling land or real property is subject to the real property capital gains tax (imp Ă´t sur les plus-values). The taxable gain is the selling price less acquisition costs and related expenses. The first CFC20 million (US$) are exempted from tax. The applicable tax rate depends on the holding period of the property:

French Polynesia - more data and information

• Guide to buying houses and registering property sales in French Polynesia

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