Sale of a NEW house

[ScrumpyJack]

We have a new house that is a house that was a new build and completed a year ago.

Does anyone know what we pay back in taxes etc if we sell this house?

[Les]

As a basic guide, you will pay TVA @19.6% on the sale price, minus any TVA paid during construction, if you have the invoices in your name to prove it.

[ScrumpyJack]

The house was built by a company.

So we bought the land got a building contructor involved we submitted the necessary Permis etc and they took it from there.  We paid them as the house progressed we have obviously the factures for each stage payment.

So the way I read that is that the TVA was paid by us as part of each stage payment.  There fore we only pay TVA on the profit. 

ie house build cost us 100,000€ (not really imaginary figure) we sold for 120,000€ (again fictous figure) so we pay the taxes on the selling price minus the buying price orthe 20€  profit made? Does the land price come into the equation?

[BJSLIV]

The land is included in the calculation as VAT payable is calculated from the total selling price.

As their was no tax paid on the land purchase, there is no credit available from that source.

Put another way building land is not liable to VAT, the land once developed is taxable!

 

[Les]

As I said above, you do not pay TVA on the profit of the sale, it's based on the Sale price of the property you receive minus any TVA already paid.

First of all, add up all the VAT paid for the various items

concerning your house:

Building company, ground works, kitchen, electricity & water

connexions also major garden installations (i.e. terraces, swimming pool).

--> call it Total A

 Then calculate the VAT on the sale price --> call it Total B

 Calculate B-A and you have the amount to be paid to the

state.

 This calculation is on the basis that it is your main house and

you are tax resident in France.

[ScrumpyJack]

Thanks!  But one question puzzles me, yes you are right we paid no TVA on the land so when we sell this property we are selling the land as well why would we pay TVA on the sale of the land?  Only a niggley question no big deal just want to clarify it all.

AND what happens if we don't make a profit? do they give us some money back?

[Les]

If you bought the land through an agent there would probably be an element of TVA in their fee, you should be able to claim that portion back.

[PaulT]

[quote user="ScrumpyJack"]

Thanks!  But one question puzzles me, yes you are right we paid no TVA on the land so when we sell this property we are selling the land as well why would we pay TVA on the sale of the land?  Only a niggley question no big deal just want to clarify it all.

AND what happens if we don't make a profit? do they give us some money back?

[/quote]

Because that is the French system and any one in France should accept the French system - it is not the UK

[dragonrouge]

Dear P2 of course but equally there may be some amongst us who do not understand the concept.

We do not live in Stevenage Taunton Midsomer Norton or the like we live in France

[Pommier]

What happens if you own a newish house (under 5 years) but bought it ready built (ie it was a speculative build rather than commissioned by us), so there were no TVA bills as we just bought the house in the usual way, plus agents fees plus notaires.

The house had been built for a year when we bought it, so presumably so long as we keep it for 4 years there would be no TVA payable, but if  we sell sooner, how would any TVA liability be calculated?

[Pommier]

Just to add; we're not thinking f moving, but it's as well to be aware of implications if we should want to move in future.

Thanks for any advice!

[PaulT]

[quote user="dragonrouge"]Dear P2 of course but equally there may be some amongst us who do not understand the concept. We do not live in Stevenage Taunton Midsomer Norton or the like we live in France[/quote]

Dragonrouge

My comments were aimed at the OP from another post where he stated that anyone buying in France should speak French.

[Les]

The TVA would have been paid by the original seller, the TVA I believe, is only payable on the first sale.

[Pommier]

I'd misunderstood as I thought that TVA was payable every time a house under 5 years old was sold.

So the builders (BMP) will already have paid any TVA and if we wanted to sell in a year or 2 there would be nothing for us to pay?

[BJSLIV]

VAT applies to the first sale of a property by an individual if that occurs within five years of completion. The initial sale by the constructor doesn't count.

In practice te impact on the total proceeds of the sale is very little. This is because if VAT is applied the property the taxes  collected by the notaire are lower, meaning that the percentage of the selling price that the vendor receives is higher. It realy is a  case of swings and roundabouts.

 

 

[Pommier]

So how would I know how much TVA had been already paid, as the price was inclusive and not broken down in any way?

[BJSLIV]

The VAT paid would be 19.6/119.6 ths of the purchase cost.

The VAT due would be the same proportion of any profit.

 

[Pommier]

Many thanks for the clarification.