Yet another change for CGT on second homes

[NormanH]

With the new Government another change is being proposed to the 'plus value' tax on the sale of Résidences Sécondaires

Dès cet été, le gouvernement devrait revenir au régime d’imposition

en vigueur avant 2004 : les plus-values immobilières ne seront plus

soumises au prélèvement forfaitaire de 19% mais taxées selon la tranche

d’imposition sur le revenu du ménage. S’y s’ajoutent les prélèvements

sociaux (15,5% au 1er juillet 2012).

En revanche, les abattements seront plus avantageux : 5% par an dès la

3ème année de détention, pour aboutir à une exonération totale au bout

de 22 ans (contre 30 ans aujourd’hui).

Source: http://www.capital.fr/immobilier/actualites/fiscalite-des-plus-values-encadrement-des-loyers-les-premieres-reformes-sur-l-immobilier-attendues-des-cet-ete-722148

[WendyG]

Please for a residence secondaire owner but not 100% fluent in French, could someone trranslate into English.

WendyG

[NormanH]

Sorry, I assume that people will use a translator.[:$]

A machine translation gives the following adequate explanation:

Starting this summer, the government should return to the tax system in force before 2004:  real estate capital gains will no longer be subject to a standard deduction of 19% but taxed under the tax bracket of household income.  There are additional social taxes (15.5% on 1 July 2012).  However, the rebates will be more beneficial: 5% per year from the third year of ownership, leading to a total exemption after 22 years (against 30 today)

I remind you that this is only a proposition so far.

If you aren't sure of the  translatation of  a French text you could  use Google or an add-on such as Globefish.

https://addons.mozilla.org/en-US/firefox/addon/globefish/

[woolybanana]

How do they calculate the income of foreign residents?

[NormanH]

Interesting point. I was going to say from their tax returns, but I don't think non-residents  with  holiday homes have to declare their income here do they?

I sold houses before 2004 but always a main residence, so I am not sure how the system worked at the time for second homes.

To remind everyone of the current situation, which this proposition would replace :

http://www.capital.fr/immobilier/actualites/plus-values-immobilieres-la-fiscalite-s-alourdit-pour-les-vendeurs-695068

[woolybanana]

So, there is a minimum of 15odd % payable by everyone and perhaps that is all for foreigners. We await developments.

[YCCMB]

I was wondering exactly the same thing. No, as a second home owner there is no requirement to submit a French tax return. However, I assume that the proposal is probably that old chestnut always trotted out by my former (French) employer - used whenever a "global" edict was issued from Head Office which was, in fact, only applicable in France, or designed using French criteria under the mistaken assumption that "French" size fits all: "c'est très franco-francophone". In this case, it'll probably work just fine for French expats who, whilst living and/or working abroad will still have income in France or a need to complete a French tax return. AFAIK, there's never been a mechanism or requirement for second home owners to declare their non-French income in France. Of course, if they have french income from, say, holiday rentals, then that should be declared...

[NormanH]

On the Service public site

http://vosdroits.service-public.fr/F10864.xhtml

 I found

Exonérations d'imposition

Les principales exonérations concernent les cas suivants :

Vente de certains biens

• Résidence principale
  et dépendances (garages, aires de stationnement, cours..),

• Bien dont le montant (ou chaque part indivise) ne dépasse pas
  15.000 €
  ,

• Ancien domicile de personnes âgées accueillies en maison de
  retraite médicalisée ou d'adultes handicapés hébergés en foyer d'accueil
  médicalisé sous certaines conditions liées notamment aux ressources de
  l'intéressé et à son ancien domicile qui doit être vendu dans les 2 ans
  suivant l'entrée dans l'établissement médicalisé et rester inoccupé
  durant cette période,

• Habitation située en France de personnes non-résidentes, sous certaines conditions,

• Bien dont le vendeur est titulaire d'une

  pension de vieillesse ou de réversion ou d'une carte d'invalidité (de
  2ème ou 3ème catégorie) sous certaines conditions (de ressources
  notamment).

[YCCMB]

Ah but, yeah but:

Habitation en France des non-résidents

Qui est concerné ?

Les Français domiciliés hors de France et les ressortissants d'un Etat

membre de l'Union européenne, de l'Islande ou de la Norvège.

Première vente

La première vente d'une habitation en France par un non-résident est exonérée si :

• le ressortissant a été fiscalement domicilié en France de manière continue pendant au moins 2 ans avant la vente ;
• il a eu la libre disposition du bien vendu au moins depuis le 1^er janvier de l'année précédant celle de la vente.

[Pickles]

[quote user="woolybanana"]How do they calculate the income of foreign residents?[/quote]

Any French income of non-residents is taxed at 20% from the first euro. Perhaps they will apply this rate.

[parsnips]

[quote user="Pickles"][quote user="woolybanana"]How do they calculate the income of foreign residents?[/quote]

Any French income of non-residents is taxed at 20% from the first euro. Perhaps they will apply this rate.

[/quote]

Hi,

 It's taxed at 20% after all the same allowances and reductions as a resident would get.

[idun]

[quote user="Pickles"][quote user="woolybanana"]How do they calculate the income of foreign residents?[/quote]
Any French income of non-residents is taxed at 20% from the first euro. Perhaps they will apply this rate.


[/quote]

 

WOW Pickles, what a sweeping statement and as a sweeping statement is wrong. I know, as all our income is from France and we live in the UK. So we certainly have french income and are non resident!

 

[nomoss]

I believe the current system dates back to early 2006. Previous to that, for residents, gains on property were added to income, while non residents were taxed at a high fixed rate (36% comes to mind). Both, I believe, could reduce the gain by 11% for each full year after the first five years that the property had been owned.

Brussels ruled this was discriminatory against EU non residents, leading to the current system. I think non EU non residents still pay a high fixed rate.

I am unsure how France can change back to a system which Brussels ruled against.

Edit: Grammar

[parsnips]

Hi,

      If you can produce paperwork to prove that you would pay a lower rate than 20% in the UK , the french will reduce the rate.  This is no doubt a result of the discrimination ruling.