Cost and tax implications of selling in France

[brooking]

We are trying to work out if it's worth selling our holiday home in France but need to understand all the related costs. We are resident in UK.

What are the Tax implications/ costs of selling in France, the property has been owned for four years. Does the tax burden change if sold after five years of ownership?

Also, can anyone give any idea of the costs of notaire's fees for sale, other legal costs of sale, typical estate agents fee plus anything else we should consider.

One last thing does anyone know the typical cost charged by electricity and water companies for installing independent metered supplies to a property? The property was sold to us with meters but we soon learnt that this portion of a sub-divided house did not have independent supplies but was piggy-backed off the original house's services.

Any help appreciated.

Thanks.

[BJSLIV]

What are the Tax implications/ costs of selling in France, the property has been owned for four years. Does the tax burden change if sold after five years of ownership?

The proportion of the gain that is taxed in France reduces by 10% for every year of ownership after the first five. So after five full years ownership you would pay tax at 16% on 90% of the gain. I suspect that if you are selling a converted property after a relatively short period the gain won't be too significant. You can offset selling expenses against the gain. You will also be liable for tax in the UK at 18% of the gain , less the usual annual allowances , and any tax paid in France. So this means that the 10% saved in France because of five years ownership is lost in the UK. In your case I imagine that there will also be a significant gain because of the change in the rate of exchange which will be taxable exclusively in the UK!
Depending on the value of the property you may be required to pay a further 1% to an independent body to check the CGT liability has been properly accounted for.

Also, can anyone give any idea of the costs of notaire's fees for sale, other legal costs of sale, typical estate agents fee plus anything else we should consider.

There are no Notaire's fees to pay though you will probably have asbestos, lead, energy surveys to pay for, say £500. As you know it is the purchaser who pays the estate agent fees . However it's safer to look at it on the basis that you will lose between 5 and 8% of the advertised selling price.

One last thing does anyone know the typical cost charged by electricity and water companies for installing independent metered supplies to a property? The property was sold to us with meters but we soon learnt that this portion of a sub-divided house did not have independent supplies but was piggy-backed off the original house's services.

That cost will depend on how much work is required which will be dependant on the layout of the property. It might be wise to assume £1000 for each service. The cost could be offset against your capital gain!

[NormanH]

"As you know it is the purchaser who pays the estate agent fees ."

Has that changed in the last few years?

I sold a house in 1998 and I had to pay the agents, and when I bought in 1999, and in 2001 I didn't.

Of course you can argue that the money is sourced from the purchase, but I am thinking of who pays directly, and I was surprised by what BJSLIV wrote.