Real estate crowdfunding: what taxation?

Investing in real estate transactions is subject to tax levies that differ depending on the investor's country of residence. Find out what taxes are applied to real estate crowdfunding investments.

I. Taxation For French tax residents

Individuals domiciled in France for tax purposes are in principle subject to a 30% tax (prélèvement forfaitaire unique or "PFU") on bond income (interest received or "bond coupons").

In fact, this rate is broken down as follows:

• 12.8% income tax ("IR");
• And 17.2% social security contributions ("CSG" / "CRDS").

However, it should be noted thata waiver of IR can be requested under certain conditions:

• the household's reference tax income shown on the tax notice drawn up for the income of the year before last preceding the payment of the bond income must be less than €25,000 (for single, divorced or widowed taxpayers) or €50,000 (for taxpayers subject to joint taxation).

In the context of bond issues carried out on the platform, Raizers declares and pays the PFU on behalf of investors. No action is required from French tax residents, the income is directly declared to the tax department and the returns are pre-filled. Legal entities are not subject to tax deductions at the time of the interest payment but must declare the interest as "Financial Income". They will be subject to corporate income tax.

II. Taxation For French or Swiss tax non-residents

Individuals or legal entities that are not fiscally domiciled in France are not subject to any taxation in France.

However, you will have to find out in your country of residence about the administrative steps to be taken in the case of bond income.

III. Taxation For Swiss residents

1. Investment in a Swiss-based operation

For individuals or legal entities who are resident in Switzerland for tax purposes and who have subscribed to Swiss bonds, the income from the bonds is subject to withholding tax ("IA"). In the case of bond issues made on the Platform, this IA is paid directly by the Issuer to the Swiss tax authorities at the time of the annual interest payment.

In order to recover the amount of IA that has been deducted with each interest payment, the "Estimate of Securities" section must be completed by the investor on his or her tax return. This will include the number of bonds subscribed for, their face value and the interest received.

You are also requested to attach to the tax return the various notices that will have been communicated by Raizers at each interest payment. This notice shows the gross amount of interest received, the amount of IA deducted and the net amount of interest.

2. Investment in an operation based outside Switzerland

For individuals or legal entities who are resident in Switzerland for tax purposes and who have subscribed to foreign (notably French) bonds, no IA is applicable. However, it is necessary to inquire in the country of tax residence about the administrative steps to be taken in the context of bond income.

IV. Taxation For frontier workers

For cross-border workers, i.e. French tax residents who are covered by a foreign social security system (European Union, European Economic Area or Switzerland), it is possible to be exempted from the CSG and CRDS deductions.

Thus, they are in principle subject to a 20.3% tax on bond income.

In fact, this rate is broken down as follows:

• 12.8% IR (income tax);
• And 7.5% solidarity levy.

In the context of bond issues carried out on the platform, Raizers declares and pays the PFU on behalf of investors. No action is required by the cross-border workers, the income is directly declared to the tax department and the returns are pre-filled.

Raizers simplifies your tax procedures thanks to a dedicated space on your profile where you can directly make an exemption declaration if you have a special status and download your Unique Tax Form (IFU).