Bothered and bewildered

[Egoprime]

I am thinking of selling my second home in France and buying another in a different area.

I have only had the house just over a year. Therefore, I am now quiet satisfied that because it’s a second home I would be libel to CGT of 16% on the profit or am I? I have been informed that if I buy another house in France I am not Libel!!! Can anyone with advice or information help, I would be eternally grateful?

 

Also TVA, do you have to pay the difference each time you sell a house, or is it that the house I bought was new. Again please help someone, who is confused and bewildered.

 

Ron :

[Moorejw]

Because you paid reduced TVA on your new house if you sell in under 2 years you have to repay the difference. This only applies to houses under 5 years old. As for Plus Value (CGT) the laws changed in Jan 2004 and you should ask your Notaire for an estimate of your dues. If you are not a French resident the rules are different (e.g. you do not pay the 10% social charges). AFAIK you are only exempt from Plus Value if the residence is your primary residence (i.e. you live there fulltime).

[Will]

You will almost certainly be liable for plus value (capital gains tax) on 16% of the difference between buying and selling costs of a secondary home. I understand there is a higher rate if you are not an EU citizen. There are a number of things you can take into account to reduce the tax liability, mainly notaires and agency fees paid by you whan you originally bought the house, certain costs involved with selling, and the cost of certain improvements supported by detailed invoices from French-registered tradesmen.

If you are French resident for tax purposes, i.e. you have made a tax return in France, and it is your principal residence, you will normally not be liable for plus value.