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Some new austerity measures


NormanH

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Further details today:

ce sont les détenteurs de patrimoine qui seront le plus mis à

contribution par la panoplie de mesures, qui inclut taxe sur les revenus

supérieurs à 500.000 euros, hausse des prélèvements sur l'épargne et

les plus-values immobilières
, coup de rabot de 10% sur les niches

fiscales, hausse des prix du tabac, baisse des exonérations de charges

patronales sur les heures supplémentaires…

As mentioned in another thread it is the abolition of the automatic reduction of 10% each year after 5 years on the taxe on the 'plus value' which is most likely to affect readers of this Forum.

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Thank you for that Norman. It saves me having to wade through treacle to try and work out where "they" will hit me next. As things stand, nothing seems to affect me personally, but not holding my breath:  it would be unusual for "ordinary people" not to have to fork out in some way.
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Real or official? Property or other? It all depends what the govt chooses to apply. Property inflation has been huge and varies a lot within regions. The Vendée would show a loss of 2.something% but this village shows property inflation of 6+%. But if you take general inflation, well, the govt. fiddles that like crazy and has got much worse.
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[quote user="sweet 17"]So, does anyone know what the rate of inflation has been, for the last 5 years?[/quote]

They have a variety of indices that they could use, from effectively consumer prices inflation to the building cost index (which is used for increasing commercial rents). I haven't looked at the official announcement but presumably it makes reference to one of the already-available indices from INSEE.

Regards

Pickles

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I see now, Pickles.  Of course, (once you've provided the answer) I get the gist of it.

I would imagine that, if selling, it might be worthwhile to sell for less, that is minus the CGT you would otherwise pay, in order to make your place more affordable for your buyers.

No, I'm not recommending that people don't pay tax because taxes are necessary for running the country but, OTOH, if the government would fiddle about with the figures, surely you are entitled to do the same as long as it's legal? 

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[quote user="Pickles"][quote user="sweet 17"]So, does anyone know what the rate of inflation has been, for the last 5 years?[/quote]

They have a variety of indices that they could use, from effectively consumer prices inflation to the building cost index (which is used for increasing commercial rents). I haven't looked at the official announcement but presumably it makes reference to one of the already-available indices from INSEE.

Regards
Pickles
[/quote]I am sure they will use the one which gives them the best return on the tax. But then I am an old cynic.
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And you know how they are meant to take off the cost of "improvements" etc before they calculate CGT?

What I want to know is what constitute "improvements" in this context.  Obviously fosse, utilities, etc but how about fitted kitchens with appliances, woodburners and the like?

Also, are they still "allowing" you 2 years to sell your résidence pricipale and not count it as as a résidence secondaire until your time is up?

The answers could be crucial to any decisions I make about my old house so I'd welcome informed views and opinions [:)] Merci.

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[quote user="NormanH"]  .................

As mentioned in another thread it is the abolition of the automatic reduction of 10% each year after 5 years on the taxe on the 'plus value' which is most likely to affect readers of this Forum.
[/quote]

Norman, does not the abolition of the 10% reduction apply only to constructible land without buildings? I read it as a possible reduction from 10% to 5% pa of the deduction.

"Pour les terrains non-bâtis constructibles, l'abattement sur la plus-value (10% par an après cinq ans de détention) disparaîtra. Pour les autres biens, cet abattement pourrait être réduit (à 5% par an par exemple). "

 

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Here is more detail, again from le Figaro

http://www.lefigaro.fr/conjoncture/2011/08/24/04016-20110824ARTFIG00505-le-plan-de-rigueur-rapportera-1-milliard-d-euros-en-2011.php

This will have knock on effect too, I am sure...

Les complémentaires santé seront plus durement taxées

pour rapporter 1,1 milliard d'euros en 2012. Encore inexistante il y a

un an, la taxe dont s'acquittent mutuelles et assureurs privés sur les

contrats de complémentaires «responsables», va doubler, au taux de 7%.

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[quote user="sweet 17"]

I see now, Pickles.  Of course, (once you've provided the answer) I get the gist of it.

I would imagine that, if selling, it might be worthwhile to sell for less, that is minus the CGT you would otherwise pay, in order to make your place more affordable for your buyers.

No, I'm not recommending that people don't pay tax because taxes are necessary for running the country but, OTOH, if the government would fiddle about with the figures, surely you are entitled to do the same as long as it's legal? 

[/quote]

"I would imagine that, if selling, it might be worthwhile to sell for less, that is minus the CGT you would otherwise pay, in order to make your place more affordable for your buyers".

It doesn't work that way I'm afraid. You can't escape death AND taxes!

Say for example you bought a place for 100,000 euros and were selling it for 200,000 euros. If the inflation for the years you owned it was 20% then effectively you deduct 120,000 euros from your selling price to arrive at your gain (ignoring other possible deductions for the moment) So your gain would be 80,000 euros and at 19% the CGT payable would be 15,200 euros. If you lob this notional CGT off your selling price and make it 184,800 euros. You would still have CGT of 12,312 euros to pay. It has not gone away!
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[quote user="NormanH"]I translate that as
"The reduction of 10% per year after 5 years of possession on constructible land without buildings  will disappear. For other property that reduction could be reduced (to 5% for example) "
[/quote]

That's exactly as I translate it, and what I commented on, pointing out that it applied only to land without buildings.

But that is not what you put before you edited your post.

You wrote:

 I translate that as
"The reduction of 10% per year after 5 years of possession will disappear. For other property that reduction could be reduced (to 5% for example) "

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The indexation allowance will be based on official annual inflation stats, not property inflation!

For French residents the impact will be significant on second homes that are sold after extended periods of ownership.

Also for non EU residents like Norwegians and Americans who pay the much higher CGT rate, or French non residents from countries that do not have CGT like Belgium, who will not have a CGT liability at home to credit the French tax liability against.

As a result might well have damping effect on French second home values in the longer term, especially if the French CGT rate is pushed upwards, which in my opinion is more than likely.
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[quote user="NormanH"][quote user="tinabee"]

New simulator to calculate capital gains tax on property

http://www.leblogpatrimoine.com/impot/simulateur-de-plus-value-immobiliere-apres-le-24-aout-2011.html

 

[/quote]
I don't see any place in that calculator for the expenses incurred in renovation.

[/quote]

Yes, I did understand it is just a kind of stab at the plus value minus all the finer details.

And yes, I'd still like to know what renovations/improvements are allowed; as listed in my earlier post, ie, woodburners, fitted kitchen, etc.  I am sure the installation of "essentials" like water, electricity must be "off-settable".

Most importantly, I'd like to know whether you are still able to "claim" a 2-year period for trying to sell before it's counted as a résidence secondaire.

I can see, however, that you might have to pay something like 1000 euros to a fiscal representative to go through all the figures for you [+o(] but I have heard that some people manage to prepare the figures themselves and get them accepted (I don't know how exactly). 

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[quote user="sweet 17"][quote user="NormanH"][quote user="tinabee"]

New simulator to calculate capital gains tax on property

http://www.leblogpatrimoine.com/impot/simulateur-de-plus-value-immobiliere-apres-le-24-aout-2011.html

 

[/quote]
I don't see any place in that calculator for the expenses incurred in renovation.

[/quote]

Yes, I did understand it is just a kind of stab at the plus value minus all the finer details.

And yes, I'd still like to know what renovations/improvements are allowed; as listed in my earlier post, ie, woodburners, fitted kitchen, etc.  I am sure the installation of "essentials" like water, electricity must be "off-settable".

Most importantly, I'd like to know whether you are still able to "claim" a 2-year period for trying to sell before it's counted as a résidence secondaire.

I can see, however, that you might have to pay something like 1000 euros to a fiscal representative to go through all the figures for you [+o(] but I have heard that some people manage to prepare the figures themselves and get them accepted (I don't know how exactly). 

[/quote]

Me too!

 

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