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More changes to capital gains tax on property investments and holiday homes


Pickles
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According to Midi Libre, Hollande announced on the TV programme "Capital" this evening that the capital gains regime for property will go back to being the "old" system - ie exoneration after 22 years - and this may come into effect in September (or soon thereafter). In addition, he announced that in 2014 there will be a once-off reduction in capital gains tax on properties (presumably similar to the one proposed for this year that was struck out by the constitutional court). This is in an attempt to kick-start the housing market.

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[quote user="Pickles"]According to Midi Libre, Hollande announced on the TV programme "Capital" this evening that the capital gains regime for property will go back to being the "old" system - ie exoneration after 22 years - and this may come into effect in September (or soon thereafter). In addition, he announced that in 2014 there will be a once-off reduction in capital gains tax on properties (presumably similar to the one proposed for this year that was struck out by the constitutional court). This is in an attempt to kick-start the housing market.

[/quote]

Hi,

     He also recently stated that the allowance for length of detention of shares is to be 2-4 years -20%, 4-8 years -40% and over 8 years- 65%:  but this will not be legislated till the end of this year when "it will be retrospective to 01/01/2013".     Can anyone rely on this when planning their 2013 sales ?    Can we rely on any french tax rules staying fixed for more than a month or two, as this government becomes more and more panicked and disfunctional?   It's no wonder the tax receipts are going down; no-one dares sell anything !

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Thanks for all the reminders that 15 years was the norm until relatively recently: I must admit that there have been so many changes that I have completely lost the sense of which way is up. The lack of stability (across all types of taxation) does make a mockery of investment decisions and does not encourage long-term confidence.

Although obviously this affects sales of second homes and investment properties - primary residences being exempt - I don't know how much of the housing market will be affected: to me it looks more like people, because of the economic situation, are not moving unless they actually need to, .

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  • 4 weeks later...
I see the changes have come in.

Unfortunately you have to have Capital gain to benefit from these changes.

http://france.businessesforsale.com/french/search/Guest-Houses-and-Bed-and-Breakfast-Businesses-for-sale

Hope it helps some of these expats either to get buyers or where applicabel to get some return?

UK house prices are being predicted to rise by 18% by 2017 according to Savilles.  It makes it very difficult to return if things do not work out for some in France. Guess its a chance you take.

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  • 5 weeks later...
On the 2nd of August the French Ministry of Finance disclosed a document with lots of information about the property capital gains tax reform.

In a nutshell, the exemption after 22 years will be for the 19% tax part only, (with progressive rebate from the 6th year onward after acquiring the property), while the 15.5% CSG & CRDS charges will be completely exempted after 30 years, with a small rebate every from the 6th year to the 22nd year and then a much higher rebate after the 22nd year. The 25% additional rebate between the 1st of September 2013 and the 31st of August 2014 will be for both the tax part and the CSG & CRDS part. This lead to a very significant reduction of the amount to pay to the French state, which depends on the date you bought your property and the amount of capital gains. The additional capital gains tax above 50 000 euros is still on, however for a married couple or a non married but official couple the 50 000 euros (after applying the various rebates mentionned above) is considered for each partner, which means that if you get a 90 000 capital gains after all the rebates a couple will not pay additional 2% tax as for each of them 45 000 is below the 50 000 euros mark....

Also remember that for calculating the capital gains,  the selling price should be taken once you deducted the fees that you paid to an estate agent, if you plan to sell through an estate agent, and the tax rules allows you to inflate the acquisition price by a flat rate of 7.5% (acquisition costs) and also another flat rate of 15% for refurbishement if you own the property for more than 5 years (whether you did the refirbishment or not).

There is a lot of information on the blog:[:)]

http://frenchpropertytrend.wordpress.com/

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On the 2nd of August the French Ministry of Finance disclosed a document with lots of information about the property capital gains tax reform.

In a nutshell, the exemption after 22 years will be for the 19% tax part only, (with progressive rebate from the 6th year onward after acquiring the property), while the 15.5% CSG & CRDS charges will be completely exempted after 30 years, with a small rebate every from the 6th year to the 22nd year and then a much higher rebate after the 22nd year. The 25% additional rebate between the 1st of September 2013 and the 31st of August 2014 will be for both the tax part and the CSG & CRDS part. This lead to a very significant reduction of the amount to pay to the French state, which depends on the date you bought your property and the amount of capital gains. The additional capital gains tax above 50 000 euros is still on, however for a married couple or a non married but official couple the 50 000 euros (after applying the various rebates mentionned above) is considered for each partner, which means that if you get a 90 000 capital gains after all the rebates a couple will not pay additional 2% tax as for each of them 45 000 is below the 50 000 euros mark....

Also remember that for calculating the capital gains,  the selling price should be taken once you deducted the fees that you paid to an estate agent, if you plan to sell through an estate agent, and the tax rules allows you to inflate the acquisition price by a flat rate of 7.5% (acquisition costs) and also another flat rate of 15% for refurbishement if you own the property for more than 5 years (whether you did the refirbishment or not).

There is a lot of information on the blog:[:)]

http://frenchpropertytrend.wordpress.com/

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