Donna Noble

I have a friend who has a house in France and is thinking about converting the adjoining barn (his property) into another home (not for renting out but for his mother to stay in when she visits). It would have it's own front door but share the same garden as the current house.

He wants to know if this would be subject to increased tax in France? And would it become a second "second home"? Are there any other tax issues either the French or UK end that he needs to consider before going ahead with the project?

dmu

Hi,
Your friend should firstly enquire at the Mairie as to whether he can (= is allowed to) convert the barn, and then file the appropriate plans for approval and hopefully acquire a Permis de Construire.
The Taxe Foncière (Property Tax) would go up considerably, as a barn is considered as agricultural and uninhabitable. And if your friend will still be paying Taxe d'Habitation (Occupancy Tax) on his house as from this year, he'll have that Taxe extra to pay, as soon as the barn is inhabitable (i.e. running water and electricity).
Others will come along with more details, but these are the basics.

EuroTrash

Yes as DMU says, he would need to apply for planning permission including change of use, since as a barn it will currently be classed as agricultural use and he wants to change it for residential use.

He can get definitive answers from the planning department when he goes to sort out his application, or they may refer him to the tax office. But basically, yes there will be tax implications. It would add habitable space to the property which obviously would affect the taxe d'habitation calculation. This is all up in the air at the moment as many French taxpayers will stop paying taxe d'hab on their main homes over the next few years, but I imagine this conversion will be classed as a separate residence so it could be swings and roundabouts for him - he may end up no longer paying tdh on his own place but paying it on this one instead.

I believe he'll need an architect to draw up the plans unless the total surface area is below a limit which I forget but it's very low, and the plans will need to show energy calculations to confirm that the property's carbon footprint will be within current building normes. Again, the planning department will advise on this if he asks.

If he's on a fosse system, that may also need to be upgraded.

But all these things depend on the specifics of the buildings, local authority policies and how the local authorities interpret the national regulations.

First thing is to find out whether the change of use would be approved, and take it from there.

EuroTrash

Sorry, just re-read your post and noticed this bit - I read it as "a second home" first time round.

If your friend isn't tax resident in France then the changes to the way taxe d'hab is going to be charged won't benefit him, he will keep paying it. So yes, he will pay proportionally more, for instance if the barn is the same size at the house he would likely end up paying double what he pays now. It all depends how the layout is configured, how many bathrooms (because they add to the tax) / utility rooms (because they're not counted as habitable space) etc.

There would also of course be CGT implications if/when he sells.

Donna Noble

Thank you for all the very useful information. Yes indeed, he is UK tax resident and currently spends at max about 8 weeks a year at his French house. I think he expects the initial one-off costs to be part and parcel of the whole project but the possible increase in property taxes could render all non-viable considering the time that will be spent there over the year.

petitefrancaise

I have a good friend who is an architect near Toulouse. She is frequently asked about conversions on properties by the local ex-pat group since she's scottish.
First stop is Mairie for informal advice about conversion. They will often know the property and will give a heads up of possible issues.
Size - I don't know the measurement (but it is small) for when you must have architect's drawings for planning permission but a barn would definitely require it. A consultation with local architect that knows the mairie would be a very good idea - and they might be able to get something through that would otherwise be problematic.