CG Tax on house sale

[bearsagrudge]

When selling one's home in France, assuming the home has been owned for more than 2 years and one has been resident (for tax purposes) in France for 2 years what is the proceedure (in regard to CG tax only)?

Does the Notaire keep the tax untill the issue is sorted out beweeen him and the tax man or is it incumbent upon the vendor to deal with the taxman?  In other words, if the vendor can prove 2 years tax residency does the quetion of capital gains just not arise?

I am selling my place and have a fear that the French tax system may unnecessarily hang onto my cash for ages....

Thanks

[Baz]

From my own experience, the Notaire is responsible to collect  all tax liabilities on behalf of the tax authorities. He will therefore decide which rules to apply and will pay you the proceeds less any tax liability. The proceeds should be available to you a few days after completion, but it is best to sort out any tax queries with the Notaire at the earliest possible time, as this will speed up and smooth out the process.

Baz

[Sunday Driver]

The time qualification for residency with regard to capital gains tax was abolished in 2004, therefore you will have no tax liability.  Your notaire will confirm the position within five minutes...

 

[bearsagrudge]

I understood that in 2003 rather than the time qualifiaction being abolished it was reduced from 5 years to 2 years of 'Tax residencey' as opposed to just residence.  Obviously the house must also be principle res.... Has nayone got a definite on this?

Thanks

[Bugsy]

Suggest you read the post from SD, it's pretty clear.............................[:)]

[Sunday Driver]

If you want something definite, then you will find it here on the French notaire's national [url=http://www.notaires.fr/notaires/notaires.nsf/V_TC_PUB/GAINS-REAL-ESTATE]WEBSITE[/url].

That's where I got it from - better than guessing......[;-)]

 

 

 

[bearsagrudge]

Thank you Sunday driver.  I see why I had a confused inderstanding.  The tax payong for 2 years is applicable but only if a no French Citizen is living outside of France.  Not appliocable to resodent of France in primary dwelling.

For anyone else... interested in the item here is an extract......  "The exemption for a primary residence would be

retained, with no requirement on length of occupancy. In order to

qualify for this exemption, the building must serve as the seller’s

residence on the day of the transfer. For non-residents, French

citizens residing outside the country would continue to receive an

exemption on their residence in France. This benefit would also be

extended to EU nationals. It would apply to the initial sale (after 1

January 2004) of an EU national’s residence in France, and would be

reserved for non-resident sellers who paid taxes in France for two

consecutive years at some point in the past. Don’t forget that assets

for which the selling price was less than or equal to €15,000 do not

qualify for the exemption".

Although having said that I do think a few hundred euros on a tax lawyer will be well spent considering what is at stake.

Regards

K

[BJSLIV]

I don't see why you would need a tax lawyer. Its all perfectly simple.

If you have been paying tax in France and its your main residence at the time of the sale there is no liability.

The two year business only comes into play if you are living abroad at the time of the sale. The sole purpose of that part of the text is to avoid people abusing the previous clause which allows French / EU citizens to sell what had been their residence prior to leaving France.

 

[Gastines]

Thanks for clearing that point up,S.D. I  always thought [not my stronge point] that the 2 year rule applied.

Regards. 

[Sunday Driver]

A tax lawyer would take out his copy of the code general des impots, look up Article 150-U then say "Non, Monsieur Bearsagrudge, zee sale of your 'ouse will not be subject to capital gains tax. So, zat will be 400 euros, s'il vous plait".

To achieve the same result without paying the 400 euros:

Go to http://www.legifrance.gouv.fr

Select "codes", then "code general des impots".

Scroll down to Art 150-U which sets out the exemptions from CGT and note the following section:

II. - Les dispositions du I ne s'appliquent pas aux immeubles, aux parties d'immeubles ou aux droits relatifs à ces biens :
   1º Qui constituent la résidence principale du cédant au jour de la cession ;

It's all there.....[:)]

 

[bearsagrudge]

[quote user="BJSLIV"]

I don't see why you would need a tax lawyer. Its all perfectly simple.

[/quote]

Great, thanks for that, I will take your advise and not use a lawyer.  You're not by any chance.... a 'bloke in a pub?'

[Will]

In cases like this, it is normally cut and dried and the tax is worked out by the notaire and the tax office. There is not usually any scope for negotiation or appeal so a tax lawyer would not be necessary. In a few cases the authorities will insist on you usung a tax representative - this is mainly (but not exclusively) in the sale of higher value properties owned by non-French tax residents where somebody is needed to, in effect, stand as guarantor.

Where the tax liability is not clearly defined, for example you may be selling off only part of the property, or the property may have been used partly as your residence and partly for a business (including gites), then consulting a tax specialist can be a good idea.

 

[More2Learn]

With the recent changes in the Health Insurance coverage by CPAM, there seems to be a number of people lookinhg to sell up and return to UK.

I was wondering what tax liability might exist if  they hadn't been resident for much over a year and were just looking to get back what they paid for the property including Estate Agents and Legal fee's.

MOre2learn.

[BJSLIV]

As they say no pain without gain. So if you don't make a gain there won't be any tax to pay.

However overall you are likely to make a small loss because the purchaser will have to pay all the Notaire's and estate agent fees and you will probably find it hard to achieve  the sale price needed to recoup what you paid.

eg Original Sales price 100,000 plus estate agent and notaire total price say 115000

    Would you expect to sell at 115000 plus fees say 130000.

Not easy in the current market.

One caveat is that if your property is classed as a new-build then VAT would be calculated on the sales price. However if no gain is involved you will have paid a similar amount of VAT on the purchase so net there will be nothing to pay.

 

[groslard]

I posted this link in another thread.

It is a useful ready reckoner to calculate tax payable.

http://www.anil.org/guide/calculs/plusvalue/pluvalue.htm