CGT on home but still buying in France

[patchworks101]

Hi, this might sound an unusual question but I'm sure somebody must have experienced it before.

I have a house in France and am moving there permanently in a couple of months. I will register as a resident and french tax payer etc. However, we do not intend for that house to be our permanent residence and will then be looking for a larger property to be our home.

The question I have is - we will be selling our current house (principle residence) at the same time as looking for a new one. If we find the 'dream home', but have not yet sold our current one, will we be liable to CGT on the eventual sale as it will then, technically, be a second home? I know I can put a clause supensive on our purchase contract but have been told that a number of immobiliers (particularly those that are part of large chains) do not like/will not accept it.

Has anyone gone through this already and got any suggestions please.

Thanks

Bob B

(I tried the search tool but unfortunately the search tool only takes you to the main forum heading that contains a thread but not to any thread that might contain the answer)

[Sunday Driver]

Normally, once you move into your French house "full time" it becomes your permanent residence.  Provided it remains your permanent residence until such time as you sell it, it is exempt from CGT.

If you then purchase a new house (in which you become permanently resident), then you have two years in which to sell the old house, free of CGT.  You should ensure the old house remains empty during this period, otherwise you'll have to continue paying the habitation tax on it.

However, the tax authorities may look at how long you have lived in your current house, and if you sell it within a short period, they could take the view that it's purchase was merely speculation and therefore they may disallow the CGT exemption.  In your case, if you move in to your former "maison secondaire" then sell it within a few months, I suspect it will be regarded as a potential tax avoidance exercise.

 

[patchworks101]

 Hi and thanks for this. We are moving into our "maison secondaire" and will, likely, be there for several months before we find what we're looking for and the purchase goes through. It's good to know that we then can have upto 2 years to sell the old house and won't have to rush it. We can only hope the taxman looks kindly on us as we've already had the house for 3.5 years [:$]

Bob B