mint Posted November 1, 2009 Share Posted November 1, 2009 being able to own 2 properties before you sell one and have to pay Capital Gains Tax?It seems that the OH and I will be buying another property next week here in France.No, we're not capitalists and trying to make loadsa money or anything as exciting as all that.However, we might be buying another property for when we are too old or too decrepit to look after our present one.Can someone, who knows about these things, please advise me as to whether I could keep 2 properties for up to 2 years before selling one without incurring CGT in France.I understand that neither property could be let and that insurance and TH and TF will be payable on one or both.No, I'm NOT a property speculator, merely trying to provide for our own future and, hopefully, not have to depend on anybody or, perish the thought, the State, to provide for us.Thank you in advance for your thoughts. Link to comment Share on other sites More sharing options...
Pickles Posted November 1, 2009 Share Posted November 1, 2009 You may be thinking a little too hard. You currently live in house A, which is your main residence. You buy house B, and presumably either let it or renovate it or both, or just use it as a holiday home. Eventually, you sell house A (whilst it is still your main residence) and move into House B. There is no CGT to pay on House A, because it was your main residence at the time that you sold it. Are you thinking that you might transfer your main residence to be house B whilst then using A as an investment property? If so then if you have owned house A for fifteen years or more at the time of sale, then again there would be no CGT to pay on the sale of house A.RegardsPickles Link to comment Share on other sites More sharing options...
mint Posted November 1, 2009 Author Share Posted November 1, 2009 Thank you, Pickles. No, not trying to be clever or to avoid taxes; merely trying to work out what we have to pay.House A, still here, still main residence.House B, probably by the end of next week.So, we pay TH, TB, etc on both. Chances are, we will be moving into House B next year or the year after, when we have sold House A.Does that mean, no CGT as House A is not intended to be any sort of investment but just the house we live in.Similarly, House B, won't be bought as an investment but as a house for decreptitude and will be easier to manage when we can no longer carry heavy logs of wood and cans of petrôle just to keep warm(ish). Link to comment Share on other sites More sharing options...
Pickles Posted November 1, 2009 Share Posted November 1, 2009 Given that house A will essentially be your main residence until you sell it, then there will be no CGT to pay on its sale.RegardsPickles Link to comment Share on other sites More sharing options...
mint Posted November 1, 2009 Author Share Posted November 1, 2009 Thank you, Pickles. Is there a 2 year limit, however?The official thinking will be that it will have taken us a couple of years to sell up? Link to comment Share on other sites More sharing options...
Pickles Posted November 1, 2009 Share Posted November 1, 2009 If you buy house B whilst still living in house A, and continue to live in house A for however long it takes to sell house A (1 month, 1 year, 10 years), then there will be no CGT on the sale of house A.If you move into house B (eg decrepitude sets in quicker than you expected!) and hence house A is not your main residence at the time of sale, then the exoneration from CGT on house A still applies "for the length of time that it would normally be expected to take for a property to sell" (rough translation). This I understand is normally assumed to be 1 year, though it is not documented as such.If you split your time between the two homes, then the one for which you claim taxe d'hab allowances is the one that will be assumed to be your main residence.RegardsPickles Link to comment Share on other sites More sharing options...
Gardengirl Posted November 1, 2009 Share Posted November 1, 2009 What's this Sweet - have you found a place already? That's quick!GG Link to comment Share on other sites More sharing options...
Sunday Driver Posted November 1, 2009 Share Posted November 1, 2009 [quote user="Pickles"]If you move into house B (eg decrepitude sets in quicker than you expected!) and hence house A is not your main residence at the time of sale, then the exoneration from CGT on house A still applies "for the length of time that it would normally be expected to take for a property to sell" (rough translation). This I understand is normally assumed to be 1 year, though it is not documented as such.[/quote]Tax bulletin 8 M-1-09 (31 March 2009) recognises the extent of potential delays due to the current property market and allows a two year period as the 'norm'. Link to comment Share on other sites More sharing options...
mint Posted November 1, 2009 Author Share Posted November 1, 2009 Pickles, understood. Thank you.GG, yes I think so..........haven't fallen in love (see other thread) but, at my time in life, I guess love doesn't knock one over sideways as it can do when one is of less advanced years.Off to view another property tomorrow but I am pretty certain it won't be long......Will let you know where the flotsam of life leaves me.........or whatever it's called, the place where you end up and wonder how the hell you got there![:P] Link to comment Share on other sites More sharing options...
mint Posted November 2, 2009 Author Share Posted November 2, 2009 Thank you, SD, I had 2 years in my mind but I couldn't quote chapter and verse as you can![:D] Link to comment Share on other sites More sharing options...
Just Katie Posted November 2, 2009 Share Posted November 2, 2009 Hi all, and sorry for jumping in here. I have owned a house for renovation for 7 years. If, after I have renovated it, how lond would I have to live in it for before selling it if I want to avoid CGT? It is the only house I own in France and I am currently renting Link to comment Share on other sites More sharing options...
Pickles Posted November 2, 2009 Share Posted November 2, 2009 [quote user="Just Katie"]Hi all, and sorry for jumping in here. I have owned a house for renovation for 7 years. If, after I have renovated it, how long would I have to live in it for before selling it if I want to avoid CGT? It is the only house I own in France and I am currently renting[/quote]As long as the property is your main residence - ie it is where you habitually live - at the time when it is sold, then there will be NO CGT to pay when it is sold. IIRC there is no minimum time limit specified for occupation.RegardsPickles Link to comment Share on other sites More sharing options...
Just Katie Posted November 2, 2009 Share Posted November 2, 2009 Thanks PicklesSo if I live in it for one month after renovation, I can sell it and then buy another one and do the same thing? Link to comment Share on other sites More sharing options...
Pickles Posted November 2, 2009 Share Posted November 2, 2009 [quote user="Just Katie"]Thanks PicklesSo if I live in it for one month after renovation, I can sell it and then buy another one and do the same thing?[/quote]Yes. Just make sure that it is clearly established as your main residence - eg bills (electricity, water etc) should be sent there rather than to another address. If it takes you over seven years to renovate the property, and you only do one at a time, then the Fisc is hardly going to be thinking that you are hiding a property development business!RegardsPickles Link to comment Share on other sites More sharing options...
Just Katie Posted November 2, 2009 Share Posted November 2, 2009 Haha, as if!! Seriously though, anyone could live in and renovate a property within six weeks with the help of a gang of dodgy and discreet builders. I find it rather odd that the tax regime in France has such a whopping big loophole. Link to comment Share on other sites More sharing options...
Pickles Posted November 2, 2009 Share Posted November 2, 2009 [quote user="Just Katie"]Haha, as if!! Seriously though, anyone could live in and renovate a property within six weeks with the help of a gang of dodgy and discreet builders. I find it rather odd that the tax regime in France has such a whopping big loophole.[/quote]The loophole is only there "in theory". In practice, if you were doing this frequently, then the Fisc would assume that this was your source of income and would tax you accordingly. Anyway: if you can find me a gang of "dodgy and discreet" builders that can renovate a house in 6 weeks then I call upon all the other CFers to form an orderly queue behind me with their lists of jobs that need doing ....RegardsPickles Link to comment Share on other sites More sharing options...
Panda Posted November 3, 2009 Share Posted November 3, 2009 [quote user="Just Katie"]Haha, as if!! Seriously though, anyone could live in and renovate a property within six weeks with the help of a gang of dodgy and discreet builders. I find it rather odd that the tax regime in France has such a whopping big loophole.[/quote]Also of course it's taking around 18 months to sell houses in France at the moment and even then only if it's considered cheap, with the cost of renovation I can't see the country being inudated with would be developers! Link to comment Share on other sites More sharing options...
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