selling house in france questions

[Bobbykins]

Hi, we are thinking of selling our house in France, we bought it nearly five years ago for €100,000 and its now been valued at around €200,000. Question 1. I known you have to pay a bit if you sell before a number of years, does anyone know what the persentage is and on how much. Q 2, I would have to get someone in to do a report on Termites, Asbestos and lead in paint ect, does anyone know how much they cost roughly. Many thanks, Bob.  

[Russethouse]

Is the house your main residence or a Maison secondaire ?

[woolybananasbrother]

16% capital gains tax on the outstanding ten years, assuming it is a second home and that you are resident in the EU. There are some allowances but I can't remember them: one is 15% of the purchase price or you can claim allowable development expenses (though the rules on this seem to be changing and to be much stricter, especially as regards second homes).

[Bobbykins]

Main residence, Bob.

[woolybananasbrother]

Nowt to pay then except the survey of drains, termites etc. You will have needed to establish two full years of tax residence though.

[clarksinfrance]

There MAY be some tax to pay on it, but depends on certain conditions: Even if it's your main residence, IF you have made a full renovation, and you sell within 5 years of purchase, then you will be liable for TVA on the total sell price (according to my notaire,  we are holding off selling ours for 1 more year to meet the 5 yr rule). You need to seek expert advice from your notaire, you can ask for a devis to include total taxes payable.

[BJSLIV]

we are holding off selling ours for 1 more year to meet the 5 yr rule

It is easy to get too hung up on this VAT business. If you want to move now, the VAT liability isn't always too significant.

Take an example.

If you market your five year old house next year at 225,000 Euros inclusive, you would receive about 210,000 after the Notaire's fees of 15,000.

If you were to sell now at the same 225,000 Euros the reduced Notaire's fees would apply at 5,000 leaving you 220,000.

Out of that you would have a gross liability for VAT of  36000 Euros less  any VAT you paid in building the property.

Now if your property was a full new-build you will already have paid out a lot of VAT. In fact if you had work done , tax included of 163,000 Euros, you would have a reclaim of 16000 Euros.

So 220000 received less 10,000 VAT equals 210000. The same sum that you would receive if you wait until next year.

Obviously a renovation project, especially one with a large DIY content, may have a lower reclaim than a 100% new-build, but the VAT penalty of selling now might still be a lot less than you would at first think.

 

 

 

[KevinK]

Just joined site and was looking through existing threads to try and find answer to my query. I am thinking of selling an apartment which I bought as a new build 3 yrs ago for 204,000 euro inclusive of VAT at 19.6%. If I sell now is VAT included in the price to the new prospective purchaser or do they pay any VAT at all.? For eg if I sold at 225,000 euro am I then liable to pay VAT AT 19.6% on the 21,000 euro.

I am weighing up whether I should sell after Christmas or look at maybe reclaiming the VAT back on the original purchase and hang on to property for a while. I am concerned in case the VAT I have paid is "lost" if I hold on to property for more than 5 yrs. Would appreciate your advice. Thanks Kevin.