Rules governing taxation and concubinage: an overview
Living as a concubine comes with its own set of tax rules to navigate. Here's a breakdown of what you need to know:
Taxation for Concubines
Concubinage, defined as a stable and continuous cohabitation between two people without legal ties, grants each partner full legal and patrimonial independence. This means they are considered separate tax entities and file individual tax returns. Unlike married couples or PACS partners, they cannot opt for a joint tax return.
Declaring Cohabitation
Although it's not mandatory to declare concubinage to the tax office, there are instances where it's advantageous to do so. For example, if a person receives tax or social benefits such as activity bonuses or family allowances, they should declare their cohabiting status, as it can impact the calculation of those benefits.
Benefits of Declaring Cohabitation
Declaring cohabitation can open the door to certain tax advantages. For instance, the tax rebate on income tax helps alleviate the tax burden for taxpayers with moderate incomes. It's also possible to take advantage of tax credits for dependent children and deduct certain expenses up to an annual cap of 10,000 euros per cohabiting partner.
Real Estate Wealth Tax and Cohabitation
In contrast to income tax, cohabiting couples are considered a single household for real estate wealth tax purposes. If their combined personal real estate exceeds 1.3 million euros, they must file a joint declaration for the IFI (Wealth Tax).
Other Taxes and Cohabitation
For housing tax and property tax, each cohabiting partner is liable for their own personal properties. However, in the event of common property, both partners share joint and several liability for the property tax.
Declaring Cohabitation for Taxes
Unlike marriage or PACS, no specific declaration is required to report cohabitation. Each partner simply files their own income tax return, indicating their own income and expenses. No mention of cohabitation is necessary when filing the tax return.
Tax Reductions or Credits: Can you benefit from it in Cohabitation?
In general, tax credits and deductions are personal and do not apply to both cohabiting partners. However, for shared expenses, each partner can declare their share of the cost, provided they can justify the distribution.
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Further Reading:
- Income Tax
- Tax Return
- Income Statement
- Property Tax
- IFI (Wealth Tax)
For more detailed information, visit:Taxes and PACS: joint declaration, effects and advantagesIFI - The Wealth TaxProperty Tax
In the case of concubinage, each partner files individual tax returns as they are considered separate tax entities, unlike married couples or PACS partners who can opt for a joint tax return. Declaring cohabitation can open the door to certain tax advantages, such as the tax rebate on income tax and tax credits for dependent children, although these benefits are personal and do not apply to both cohabiting partners.
