Owning rental property in the UK while living in France is becoming increasingly complex and expensive. From sweeping changes to landlord legislation and rising taxation to new compliance requirements and cross-border tax considerations, British expatriates need to carefully assess whether UK property still fits their long-term financial and estate planning goals.
Living in France and owning rental property in the UK has always presented some difficulties, from dealing with tenants, property upkeep and disputes from a distance to cross-border taxation and currency risk. The rewards and desire to retain UK property may have compensated for the extra effort, but following a series of reforms, UK landlords now face their biggest challenges in decades.
Issues include the Renters’ Rights Act, the end of Section 21, revised Energy Performance Certification, Making Tax Digital, and rising costs and lower yields. Coupled with the tax implications in France and the UK, it is not surprising that many French residents with UK property are reconsidering their position.
Increasing challenges
Renters’ Rights Act
This major piece of UK housing legislation reforms how private renting works in England. Introduced in phases from May 2026, it aims to give renters more security, fairness and protection. Measures include –
- End of “no fault” evictions – With Section 21 abolished, landlords must provide a valid reason to terminate a lease. This fundamentally changes how they manage tenancies, especially when things do not go as planned.
- Fixed-term replaced by rolling tenancies – Tenants can give two months’ notice at any time, but landlords can only end a tenancy if they meet specific legal grounds. This removes predictability of income and makes planning sales, refurbishments or personal use more difficult – especially if you need flexibility due to living in France.
- Rent increases limited – Landlords can only increase rent once per year and to a level reflecting the local market rate. Tenants have enhanced rights to challenge rises. Landlords must also advertise a fixed price and cannot accept or encourage higher offers.
- Expanded tenant protections – New tenants cannot be rejected because they have children, possibly pets, or are on benefits.
Rising taxation
UK landlords have already been hit by various tax reforms. Stamp duty increased in 2024, with a further 2% surcharge for non-resident buyers. Restricting mortgage interest relief to a 20% tax credit from 2020 and abolishing the favourable tax regime for furnished holiday lets in 2025 mean many landlords now pay more tax. UK residential property is also now fully within the scope of inheritance tax, regardless of ownership structure.
And from April 2027, tax rates on rental income will increase by 2 percentage points, to 22% for basic-rate taxpayers, 42% for higher-rate and 47% for additional-rate taxpayers.
Higher costs and lower net yields
Higher taxes mean lower net yields, but there is more. Landlords are also contending with higher mortgage rates, rising maintenance, insurance and labour costs, increased admin fees, and required upgrades – all of which eat into net profits and income.
Making tax digital
The UK’s new Making Tax Digital initiative began being rolled out in April. It requires landlords and businesses to maintain and submit digital tax records, with mandatory quarterly reporting in many cases. Penalties can apply for non-compliance and late filing.
The new procedures will require more time and effort for administration, and likely higher accountancy charges too.
Energy Performance Certification
The UK government is overhauling Energy Performance Certificates. Instead of a single A–G rating, future EPCs will show multiple metrics measuring different aspects of a property’s energy performance. By 2030, rental properties must have a minimum rating of C, up from the current E, and landlords will need to meet two of three metrics, not just one.
Compliance could include installing smart meters, heating controls and battery storage, replacing old boilers, adding insultation, etc – all of which could prove costly and disruptive.
Tax considerations for British expatriates in France
French residents owning and renting out UK property must follow the terms of the UK/France double tax treaty to establish where to declare income and gains and pay tax.
Inheritance taxes: Developments in the UK are prompting some French residents to dispose of UK property. UK inheritance tax is calculated on your entire UK estate. When pensions are added to your UK property and any other UK investments next April, your UK estate could far surpass the nil rate band, generating a hefty bill for your heirs. The French succession tax system often proves more favourable here, giving each child a €100,000 allowance from each parent and rates starting at 5%. Additionally, a lot of planning can be done with liquid assets, cash and investments to reduce or potentially eliminate your succession tax liability.
Income tax: UK rental income is taxed in the UK. Although not directly taxed in France, you must still include it as part of your taxable income for the year (even if no actual UK tax was paid). You receive a credit equal to the applicable French tax and social charges, but the rental income can easily push you into a higher French tax bracket for your other taxable income.
Capital gains tax: When selling UK property, you are assessed for tax in both countries. The gain is taxable in France, with a credit for any UK tax paid on disposal. In France, you benefit from a taper relief after owning the property for five years, while in the UK you are only taxed on gains made since 2015. While the UK’s CGT annual exemption has been cut since 2024, the higher CGT rate on property was reduced from 28% to 24%.
Wealth tax: Any French resident owning property, whether in France, the UK or elsewhere, should take wealth tax into consideration. It only applies to real estate assets, but if yours total over €1.3 million, you are taxed annually on the value above €800,000. In contrast, capital investments like shares, bonds, assurance vie etc., are not liable, giving them a distinct advantage over property investments.
Making a decision
Before selling UK property and reinvesting the proceeds, it is essential to obtain personalised cross border advice. A Blevins Franks specialist can explain the tax implications in both the UK and France, identify the optimal timing for a sale, and structure a tax efficient investment portfolio aligned with your objectives, circumstances and risk profile. France offers investment solutions that provide access to well-diversified portfolios while delivering meaningful tax advantages.
If you are undecided about whether to sell, Blevins Franks can help you evaluate your options with clarity and confidence. We will guide you through the complexities, comparing property and capital investments, calculating potential tax liabilities, and assessing income and growth prospects – so you can put in place a tailored investment and estate planning strategy that reflects your long term goals.
Get in touch today.
