woody Posted March 17, 2007 Share Posted March 17, 2007 i own a house with a barn for 5 years now, if i sell the barn do i pay tax on the sale because someone said after 10years of ownership you dont pay any tax on a sale of a property but 5 years you do Link to comment Share on other sites More sharing options...
Ron Avery Posted March 17, 2007 Share Posted March 17, 2007 I own a house with a barn for 5 years now, if I sell the barn do I pay tax on the sale? yes. CGT on total Link to comment Share on other sites More sharing options...
woody Posted March 19, 2007 Author Share Posted March 19, 2007 say if i sell the barn for 56 000 euro how much tax will i have to pay and does the notaire pay it when the sale happens Link to comment Share on other sites More sharing options...
BJSLIV Posted March 19, 2007 Share Posted March 19, 2007 If you have had it for five years or less you will pay roughly 16%, if you live in the UK, or 27%, if you live in France, of the profit made on the purchase cost. The Notaire deducts it from the proceeds. If you live in the UK, there may be some UK CGT to pay , depending on your tax situation there and the size of the gain. Link to comment Share on other sites More sharing options...
Will Posted March 20, 2007 Share Posted March 20, 2007 Are you keeping the house? It isn't clear to me. If so, the notaire and tax office will have to establish the relative values of house and barn to decide what tax will be payable. Link to comment Share on other sites More sharing options...
woody Posted March 20, 2007 Author Share Posted March 20, 2007 i have a 10 year mortgage on the house but i got about 5 years left to pay so im thinking of selling the barn which came with the house to pay of the rest of the mortgage, one person said its 16% tax if owned 5 years or less so what if you owned it for 5 years 6 months and why is it 27% tax if your from the uk Link to comment Share on other sites More sharing options...
BJSLIV Posted March 20, 2007 Share Posted March 20, 2007 No its 27% if you live in France. Once you have owned it for 5 years, for each complete year after that CGT bill reduces by 10%. So after fifteen years nothing to pay in France. Link to comment Share on other sites More sharing options...
Will Posted March 20, 2007 Share Posted March 20, 2007 Strictly speaking the plus value rate is still 16% if you live in France. It's just that, for French residents, the gain is also subject to the dreaded CSG/CRDS/PS which bumps the tax burden up to 27% in total. If you are resident outside the EU, the rate is 33.3%, so be grateful for small mercies. The other significance of 5 years is that after 5 years of ownership you can claim a 15% reduction to cover necessary repairs etc. For less than 5 years ownership you can still claim, but this has to be supported by valid TVA receipts. Link to comment Share on other sites More sharing options...
chris pp Posted March 20, 2007 Share Posted March 20, 2007 So does this apply if it's your principle residence and you are selling part of it? This doesn't seem to have been made clear.Chris Link to comment Share on other sites More sharing options...
Will Posted March 21, 2007 Share Posted March 21, 2007 If it is your principal residence and you are French tax resident then you should not have to pay tax on the sale. However, it can be a different matter if the part you are selling has been rented out or used for business - in that case definitely get proper advice (i.e. don't just rely on what one notaire tells you). Link to comment Share on other sites More sharing options...
Panda Posted March 23, 2007 Share Posted March 23, 2007 HiIn my experience the important part is the value of the part of the property you want to sell when you bought it. You pay CGT on the difference between the buy and sell price of course but if like me you bought the whole property as one price it is something you need to be prepared to answer if asked. The notaire we used was great and made sure we payed only a small amount of CGT by valuing the of the part property that attracted CGT at a similar value now compared to when we bought it (4 years earlier), with a barn I would have thought that this would be easy to do as unless you've done any work on it you could quite rightly claim it has changed very little in value. It helped us that we did not try and claim any reduction for work carried out, you can't have it both ways, i.e. to state the value hasn't changed but that you've totally renovated the property, that would not work!Panda Link to comment Share on other sites More sharing options...
woody Posted March 31, 2007 Author Share Posted March 31, 2007 so you pay CGT on the difference between the buy and the sell price of the property so i paid 50k euro for the house and barn 5year ago and i would like to keep the house and sell the barn for 60k, how much CGT do you think i will have to pay. panda said she only paid a small amount of cgt but i dont know what her buy and sell price was Link to comment Share on other sites More sharing options...
Benjamin Posted March 31, 2007 Share Posted March 31, 2007 You are still going to have to identify, out of the orginal 50k, what proportion related to the barn and how much related to the house.Having answered that you can then answer your own question by reference to the information given above.I suspect that you have no idea what proportion the barn was out of the original purchase price. My advice would be to go and see a Notaire and ask him for guidelines on how to make this calculation.At the end of the day it will be for the Notaire to process the paperwork after the sale to determine the exact amount of tax to be paid so to get his advice/agreement now would save any arguments later. Link to comment Share on other sites More sharing options...
Panda Posted March 31, 2007 Share Posted March 31, 2007 HiYour situation is very different to mine, selling the barn for more than the orinignal buy price of the whole property will mean there will be a chunk of CGT to pay however you look at it. I was selling two houses, bought as one property and had to pay CGT on the second. As a pure example you could maybe say the house was bought for 35k the barn for 15k. You are selling for 60k so the difference is 45k, you will pay 16%( 27%, if you live in France) CGT on this 45k (less a proportion of the buying fees, legal and agency). As the 60k is really pure profit I don't think that's too badLater Edit after a cup of tea and a think.....I'm wondering now if this is really correct as the property you are selling is not a habitation maybe the rules are different, what I'm thinking is of course it could never be anyone's principal residence so maybe the rules are different, maybe there is no CGT on such a sale, lots of people are selling off barns, someone must know.. My experience is ony in selling a house which 'could' have been my main residence if you see my thinking. Panda Link to comment Share on other sites More sharing options...
Ron Avery Posted March 31, 2007 Share Posted March 31, 2007 [quote user="Will"]If it is your principal residence and you are French tax resident then you should not have to pay tax on the sale. However, it can be a different matter if the part you are selling has been rented out or used for business - in that case definitely get proper advice (i.e. don't just rely on what one notaire tells you).[/quote]Not sure this is the case Will. A friend of mine who is tax resident and has just one house that had a separate barn and lake, has just sold the barn and lake and paid CGT on the sale as it was not the sale of her principal residence. Not sure what figure was used but I got the impression that CGT was paid on the total price as the house was now valued at more than the original purchase price of the entire estate. Link to comment Share on other sites More sharing options...
Blanche Neige Posted March 31, 2007 Share Posted March 31, 2007 I think Ron is right, our Fr, neighbour has had to pay CGT on the barn and land he has sold to us. Link to comment Share on other sites More sharing options...
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