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Capital gains tax...


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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.

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[quote user="BJSLIV"]If you have been paying tax and the house has been your residence for more than twelve months you should have no CGT to pay.[/quote]

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?

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I read a reply on a french property  forum given by a tax expert, that stated  if it the property is your principal residence then you dont pay any CGT even if you have only had it a year, but you have to prove it is your principal residence otherwise property developers could do this all the time to make a quick profit.

If you PM me I will send you the link as I don't know if I can post it here;

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Whether or not you are liable for plus value tax, and how much, is basically up to the notaire handling the sale, who will deduct the tax from the proceeds, and your local hotel des impots. It can get complicated as to how you prove your principal residence, but as a general guide if you have made a tax return in France from the address of the house being sold, you should not be liable for plus value.

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Ah... thanks chaps... should I go talk to my notaire then...?

 My girlfriend (french) hates my present idyllic setting describing it as "un trou dans le cue de monde" and so we shall look for a location that benefits the both of us for work and play...thats if I want to keep her of course....

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There is no minimum residence period any longer - as long as you can prove to the notaire that it is your principal residence then you do not pay CGT.  The guidelines say the place where you reside for most of the year.  However, you can own it for just a few months - obviously you could not do this successively.
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I am sorry but I am  really confused with all this.

When does the percentage in the above post apply?

If I was to sell my only residence which is in France, having completed a tax form, to buy another house in France. I was under the impression that I would not have to pay CGT or anything. That I could under these circumstances keep all the money from the sale to buy another house.

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The percentages quoted above apply to cases where plus value (capital gains tax) is payable. Incidentally, there is a third rate, 33.3%, for non-European citizens selling second homes in France.

In your case, if you are a French tax resident selling your principal home, no plus value should be payable. If for any reason you were liable, you would pay the standard 16% tax, like any other European; plus a further 11% CSG, CRDS etc (which according to the cynics is your contribution to the French national debt).

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Thank you. I am not planning on moving , but it is the sort of thing that I like to get straight in my head .

 I would hate to sell my house and then not know if I was going to have a derisory sum handed back to me at the notaires !

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