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Is my house new or old?


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Hi.. I have a quick question..

I have converted a barn into habtation with the permit de construire around 3 years ago. For selling purposes and Notaires fees, is this classed as a house newer than 5 years or older? There is quite a difference in Notaire's fees (around €10,000)..

Many thanks..

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So for a buyer it's classed and 'new' with "frais de notaire reduits" ? Is this calculted from the date of the H1 or the permis de construire?

And the TVA, is this in addition to 16% CGT? I just found this on a notaire's fee calculation site:

Le vendeur supporte une T.V.A dite Résiduelle.

Celle-ci

est égale à 19,60% du prix de vente à laquelle on soustrait la T.V.A

réglée lors de la construction ou de l'acquisition.

FORMULE : TVA Résiduelle = (Prix de Vente X 19,60 %) - T.V.A Payée.

Many thanks.

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The five year period runs from when completion is notified.

The VAT deduction amounts to 19.6% of the profit.

However as it's calculated as 19.6/119.6ths of selling price less any VAT receipts that you have, it sometimes works out as being more onerous than expected.

For example you buy a barn at 10,000 and sell for 119,600 having done all the work yourself. The picky notaire disallows the UK VAT receipts, and the the various till receipts from Castorama. he will therefore expect the full 19,600 with no deduction for VAT incurred. An exaggeration but you get the idea.

If you aren't resident in France they will also expect you to pay for a fiscal representative to audit the books.

 

 

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[quote user="BJSLIV"]

The five year period runs from when completion is notified.

The VAT deduction amounts to 19.6% of the profit.

However as it's calculated as 19.6/119.6ths of selling price less any VAT receipts that you have, it sometimes works out as being more onerous than expected.

For example you buy a barn at 10,000 and sell for 119,600 having done all the work yourself. The picky notaire disallows the UK VAT receipts, and the the various till receipts from Castorama. he will therefore expect the full 19,600 with no deduction for VAT incurred. An exaggeration but you get the idea.

If you aren't resident in France they will also expect you to pay for a fiscal representative to audit the books.

[/quote]

Thanks for the responses.. So as well as any invoiced builder's

receipts from French artisans, am I allowed to submit a pile of my own

receipts from French builder's merchants / Brico stores (till

receipts)? Will I be able to offset the whole amount of that against

TVA or do they just give you the TVA back on these? All my materials

were sourced locally but some receipts are mere till receipts and some

things were bought by some tradespeople working on the house using cash

I left them to get on with the job...

I'm hearing a good accountant could be an idea?

Many thanks..

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I fear that you will have an uphill struggle reclaiming input tax (VAT) on anything other than  Artisan's bills. 

You  will need a bill showing the details of the work done, where it was done, name of customer etc etc before they will allow you to deduct the VAT paid out.

Till receipts are unlikely to be acceptable as they won't have full details of name address needed for the audit trail. 

Is this your main residence or a holiday home?

 

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It is a holiday home.. Is that of any significance? And I am resident in the UK..

Do you think 2 large orders amounting to around 5000k (one for tiles, one for plasterboard) would get through? They come complete with a charge for delivery to my actual address and full Factures in my name.. To be honest, I have no desire to put through every till receipt, most of which get so faded and tatty that they could say anything..

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Being a holiday home doesn't affect the VAT but  you will be liable for CGT. That's going to cost you 16% of the gain. They definitely won't allow anything other than Artisan's bills in that calculation.

Unless it's a very small barn and the selling price is below 100,000 you will also be lumbered with the Fiscal Representative to check the CGT calculations . They are going to cost you about 1% of the selling price. I don't know if they also check the VAT calculations. If they do they have a reputation for being very strict in the application of the rules  unlike the notaires who sometimes give the benefit of the doubt. 

When you add together VAT, CGT, Notaire's/ Estate Agents fees and the Fiscal Rep you are going to take quite a hit.

At least you are unlikely to have any significant CGT liability back in the UK.

 

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[quote user="BJSLIV"]

If you aren't resident in France they will also expect you to pay for a fiscal representative to audit the books.

[/quote]

Wasn't there a posting on here sometime last year where the seller took all of their paperwork (original purchas, allowable invoice etc.) to the local Împots and got them to verify the figures which the Notaire accepted without the need for this audit?

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Sorry Benjamin I don't remember that case. Were they non-resident?

The FRs seem to have been more to the fore in the last couple of years. It often comes as a shock at the moment of final signature session when people are made aware of these additional hurdles / costs / delay.

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[quote user="BJSLIV"]

Sorry Benjamin I don't remember that case. Were they non-resident?

[/quote]

I presume they were or they wouldn't have needed to avoid the extra fee but to be honest, whilst I remeber the gist of the posting I'm not going to swear to be 100% accurate on this one. It would make sense though as the fee is really an insurance against the Notaire getting it wrong.

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Gosh.. An expensive game this. All I want to to is sell the barn and buy another place up the road (a house).. But being hit 19.6% then 16% and another 1% is a heck of a lot to lose..

Then another 10% notaire's fees when I want to buy the other place! I make that a small fortune  :o(

Surely there's another way.. Or do I stay put for 4 more years..?

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The only good news is that the impact of the 19.6% VAT is partially offset by the lower Notaire's fees.

However unless you wait 15 years you will always have the French CGT liability.

If you waited the full 15 years you would then under current Uk legislation have a liablity for 18% UK CGT.

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I thought this figure was 150'000 Euros and over when it has to be checked by a Fiscal Representative and the Notaire usually withholds the money until it is sorted (but I think this is only if you leave France)
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  • 3 months later...
Update..

My notaire has told me that he can 'argue' that the barn had been previously inhabited at some time in the past (farmers living above the stable) and that the 19.9% would therefore not be payable. He also made reference to the fact that my builder's factures all charged 5.5% TTC..

The final acte signing is due in a couple of weeks.

Will the notaire automatically assign a fiscal representative to sign off the declaration? If he does not, might I have any 'come back' later on - or is this his libility? There has been no mention of this as I have left everything in his hands. The secretary has simply said that the money from the sale will get transferred to my account right away, taking 24-48 hrs.. Does this imply they are sorting everything out in the right way? I'm a UK resident, but plan to purchase another property in France as soon as I find the right one. The money will go to a French bank account.

Many thanks.

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