Capital gains tax on Sale...

[leonardo]

Hey all,
I know I have asked this before but I just wanted to read it again and I can't find my previous post...

I may have to sell my property.

How many years of tax residency do you require in order to escape paying tax on profit of sale?

Thank you all in advance

[lorenzo]

Hi Leonardo,
Do you really have to be paying tax or just have completed a tax return? What happens if you're not paying tax because your income is tax exempt? Also, I have read that most notaire's require 2 years tax returns before they'll let you off CGT - any truth in this, do you reckon?
All the best

[junditclaire]

Hello Leonardo
If your property is based in France, then the general rule is that after the first 5 years, you have a reduction of 10% every year which means that after 15 years you have no CGT to pay. However you also get reductions for any works that you've carried out on the property also which could help you to reduce your CGT quicker. You would be best getting your paperwork together and going to visit your notaire to figure out exactly how much you'll have to pay in order to see if it's worth your while.
Good luck.
Claire Healy
Attika International
Property in Nice & Property in Cannes

[leonardo]

Hi Claire, Thanks for the advice. Apologies as I have not logged in for a while. Do you know of any good notaries around Paris?

[junditclaire]

Hello there
Yes, the following notary office has English speaking notaires in Paris
L'Office Notarial 14 Pyramides - telephone +33 1 44 77 37 37
Good luck
Claire Healy - ATTIKA INTERNATIONAL

[Busk]

Originally Posted by junditclaire

Hello Leonardo
If your property is based in France, then the general rule is that after the first 5 years, you have a reduction of 10% every year which means that after 15 years you have no CGT to pay. However you also get reductions for any works that you've carried out on the property also which could help you to reduce your CGT quicker. You would be best getting your paperwork together and going to visit your notaire to figure out exactly how much you'll have to pay in order to see if it's worth your while.
Good luck.
Claire Healy
Attika International
Property in Nice & Property in Cannes

Hello, I am new here, but I wanted to know if I need to pay French capital gains tax on my apartment in France if I plan to sell it to buy a bigger one. I am non-EU.

Thanks,
Busk

[beardflares]

Is there a lower limit for CGT? We bought our little maison de village in S France 7.5 years ago but now need to sell as we have relocated to the Middle East.

Purchase price was 187,500 FF and we're looking for around 50k Euros (of which 8% will go to agent). So that's probably a 25k Euro increase in value. or 20-21k Euro excl agent's fees. We did some internal plastering and decoration to tidy the place up but this can hardly be construed as major works for CGT offset. Anyone any ideas what CGT we'd be looking at? Does CGT take into consideration agents fees when working out the 'gain'?

Thanks

bf

[Robert Gavin]

Is there any creative ways of reducing CGT in France?

[Attika International]

Yes, you can always reduce your CGT and your estate agent or notaire is the best person to sit down with you and work out how best to reduce your gains (Never EVer use an estate agent who recommends you ask the buyer for money under the table as often happens - this could land you in TONS of trouble!!!). There is no capital gains tax to pay on the profits from selling your French Property if you can prove that the property is your principal residence and it is held in your personal name.
If the property is a second home, in addition to a 1000€ nil rate band, there is a 10% tax allowance per year of ownership after the fifth year. Therefore in 15 years’ time the property will be free of Capital Gains Tax.
If you are non French-domiciled but living in a country in the European Union (eg UK residents), the capital gains tax rate in 2007 is 16% on secondary homes in France. If the tax payer is not in the EU then a 33% rate is imposed. For French-domiciled individuals the rate including the social contributions is 26%. This does not apply to developers or trading companies.
The gain is calculated on the difference between the sale price and the original purchase price. In addition to the purchase price certain costs such as home improvements can be deducted (either the real cost or a value of 7.5%). Only home improvements carried out by a registered professional can be taken into account.

After 5 years, the owner can ‘increase’ the original purchase price by 15% to account for improvements and expenses even without justification.

With careful calculations and if you've kept receipts for work that you've done on teh house then you should be able to get away with paying little legally.
I hope this helps
Claire Healy
Attika International
Property in Nice, Property in Cannes and New Build developments all along the Riviera and other carefully-selected areas of France