Gains
property Selling a property can result in achieving a profit. This is the gain realized upon the sale of a building relative to its purchase price. This profit can be taxed.The notary is responsible for preparing the statement of capital gains and pay tax to the tax authorities.
Who pays tax on the gain?
- Individuals: Individuals who sell property under the management of their private assets are subject to tax on capital gains.
Holders of old age pensions or disability of some cards are exempt to the two following conditions:
- not to be subjected to ISF under the year n-2 prior to the sale
- have an income tax reference for that year, below a limit set annually.
- Associates Individuals of some corporate : associates real estate companies (companies with assets at the close of the three years preceding the sale, constituted over 50% of their actual value by buildings not assigned to their own farm) and associates real estate companies, not subject to corporation tax, are subject to the regime of capital gains when they sell their individual shares.
- Taxpayers domiciled outside France : they are also liable to tax on the gain on the sale of property located in France. Capital gains realized by individuals or companies associated individuals transparent, residing in a Member State of the EEC or the EEA has concluded with France a tax treaty, are taxed at 16% . In other cases, a third sample is made.
How to calculate tax on the gain?
Determination of gross capital gain
The gross capital gain is equal to the difference between the sale price and the purchase price.- Sale price: the price of transfer to remember is the actual price as stipulated in the deed:
- it is plus certain expenses and allowances: for example, compensation of tenant eviction paid by the purchaser to the seller
- is reduced by various amounts paid by the seller: the value added tax where applicable and a fee set by decree ( example, the commission paid to a real estate costs ... release), with supporting evidence - Purchase price : the purchase price to remember is the price actually paid by the seller, as was stipulated in the deed. It is increased by a number of fees and expenses specifically listed:
- costs relating to the acquisition for free (donation. ..), whose human inheritance tax if the transferor has personally supported
- costs relating to the acquisition for consideration (vente. ..) retained either on their actual receipts to be submitted to the undersigned or for a lump sum equal to 7.5% of the purchase price for buildings. This package does not apply to sales of furniture and shares
- the cost of construction, reconstruction, enlargement, improvement or detained, either under certain conditions for their actual amount or for a flat rate of 15% of the price acquisition provided that the taxpayer sells the home more than five years after its acquisition and whether of a building (excluding land naked). If construction by the seller on a property he owned before the acquisition price represents a share at the cost of acquiring the land and secondly, the purchase price of materials and, where appropriate, the workforce. However, the work personally performed by the vendor is not taken into account
- the cost of roads, and distribution networks.
Calculation of taxable gain
Once the gross fixed capital gain, other patches are applied:- a discount of 10% per year of ownership from the sixth to the real property and shares preponderantly
estate - a fixed allowance of EUR 1 000 applied to the gross added value, adjusted as appropriate for the reduction of length of detention.
What are taxes and social charges payable?
The taxpayer who sells a property is taxable:- to tax on income attributable to the gain at the proportional rate of 16%
- to social security contributions until 1 January 2005, a total rate of 11%
When do we pay tax on the gain?
The tax on the capital gain is declared and paid, or when the mortgage the sale of a property or property rights, or at the tax office at the sale of shares of SCI.Where exemption
principal residence
The sale of principal residence by the taxpayer is exempt. It must be her usual home and effective on the date of sale.The reason for the sale is immaterial.
Some special cases:
- The building is unoccupied at the time of sale:
in three cases, the sale of vacant property may be exempt:
- When the property was occupied as a principal residence until its sale, provided that the transfer occurs within a reasonable time (assessed at one year by the tax authorities)
- When couples separate or divorce, the exemption remains if the following conditions are met:
- the building is the principal residence of the spouses during their separation
- the sale is motivated by their failure
- it occurs within a reasonable time after their separation
- Dependencies: The exemption also applies when immediate and necessary dependencies to the main house are sold in along with it (eg: garage sold the apartment and located within one kilometer from the main house, room service sold with the apartment located in the same building).
Habitual residence in France for non-residents
Individuals resident in France but not nationals of a Member State of the Union or another State party to the Agreement on the European Economic Area who concluded with France a tax treaty, are exempt from the sale of their home in France, if- they have been domiciled for tax purposes so continuously for at least two years before the sale
- they had the free disposal of the property at least since January 1 of the year preceding the sale (housing should not be rented during this period).
operations consolidation
Capital gains realized on certain transactions in land consolidation urban or rural areas are exempt. But this exemption is not final. If the property is sold or exchanged regrouped, the gain realized on this occasion is calculated by assuming that the property sold was acquired at the same price and at the same time that the property exchanged during the breakup.Transfers less than 15,000 euros
Gains from sale of property are not taxed if the sale price is less than or equal to 15,000 euros.If the property is sold undivided property, the threshold of € 15,000 is assessed against each share undivided.
When ownership of a property is divided (usufruct and bare ownership), the threshold of 15,000 euro strengthens against the value of full ownership. If
usufruct or naked ownership is sold separately, although the share price equal to its right is less than 15,000 EUR, the seller (or usufructuary bare owner) can not qualify for the exemption if the value of the property in full ownership of more than 15,000 euros.
The transfer of property held for more than 15 years
In the game of deduction of 10% per annum from the 6th year of ownership, the sale of a property the seller has owned for more 15 is not taxed as capital gains.Expropriation
Capital gains realized on the sale of all or part of immovable property or rights to such property for which a declaration of public interest was made to expropriation, are exempt.Seller shall use all of the expropriation compensation for the acquisition, laconstruction, rebuilding or expansion of one or more properties within one year after the disbursement of compensation .
The transfer of the principal residence of a member of SCI
The partner holding free property owned by an SCI as a principal residence is exempt from capital gains to the extent of his shareholding in the company.(Source of Paris Chamber of Notaries)
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