French property tax
Discussion
My dad lives in France and has decided to sell his house out there (Lot + Garonne area). Over the years he’s upgraded various bits both doing some of the work himself and also getting trades in to help, and is now looking to sell at a higher price than the base cost of the house plus the works completed.
Does anyone have any knowledge of how the tax works on capital gains (he isn’t French resident) and where he can get some quality advice from? He’s been told two completely different numbers so far and is now rightfully concerned!
Thanks
Sam
Does anyone have any knowledge of how the tax works on capital gains (he isn’t French resident) and where he can get some quality advice from? He’s been told two completely different numbers so far and is now rightfully concerned!
Thanks
Sam
I am just embarking on a sale, so will know much more in 6-months time.
The only guy that needs to be convinced is the Notaire. Until all taxes are paid, he will not release funds to your account.
The only grey area is something like that value of furnishings. A French friend tried this one but eventually got hammered as he bought and restored an old property and so did not have the requisite invoices from trades. My Notaire said, no invoice, no allowance.
My friend increased the value beyond inflation and so paid tax. He won when he bought the house at a good price because it was in a poor state of repair.
The only guy that needs to be convinced is the Notaire. Until all taxes are paid, he will not release funds to your account.
The only grey area is something like that value of furnishings. A French friend tried this one but eventually got hammered as he bought and restored an old property and so did not have the requisite invoices from trades. My Notaire said, no invoice, no allowance.
My friend increased the value beyond inflation and so paid tax. He won when he bought the house at a good price because it was in a poor state of repair.
My dad has some invoices but there are two contentious (from a French perspective) points. (1) one of the tradesmen died before completing the work so dad never got an invoice on quite a bit of the work (though has receipts for the materials) and (2) did a tonne of work himself (with he again has receipts for the materials) but obviously didn’t invoice himself!
https://www.french-property.com/guides/france/fina...
This seems to confirm what my Notaire told me. Any work not supported by a French tradesman invoice, presumably with TVA paid, is not included.
The current rate of CGT is 19%, plus you also pay Social charges of 17.2%
This seems to confirm what my Notaire told me. Any work not supported by a French tradesman invoice, presumably with TVA paid, is not included.
The current rate of CGT is 19%, plus you also pay Social charges of 17.2%
The above is correct. Signed the compromis for the sale of our place yesterday, the notaire had copies of all the major works invoices because she insisted on having them even though ours is an SCI so a bit different. As it happens we didn't have all the invoices needed because our previous accountant lost some during an office move so it looked on the face of it that there was a plus value involved but if she had read the audited accounts correctly she would have seen that this wasn't the case, she rang the "new" accountant and he assured her that the audited accounts were correct and there should be no plus value and she accepted this was the case, twitchy moment as there were over €100k of missing invoices.
The above is correct. Signed the compromis for the sale of our place yesterday, the notaire had copies of all the major works invoices because she insisted on having them even though ours is an SCI so a bit different. As it happens we didn't have all the invoices needed because our previous accountant lost some during an office move so it looked on the face of it that there was a plus value involved but if she had read the audited accounts correctly she would have seen that this wasn't the case, she rang the "new" accountant and he assured her that the audited accounts were correct and there should be no plus value and she accepted this was the case, twitchy moment as there were over €100k of missing invoices.
rdjohn said:
https://www.french-property.com/guides/france/fina...
This seems to confirm what my Notaire told me. Any work not supported by a French tradesman invoice, presumably with TVA paid, is not included.
The current rate of CGT is 19%, plus you also pay Social charges of 17.2%
I've sold twice in france , both times for more than purchase price , the last one was September last year on a house I built myself without any French trades involved . the above is true and correct, the notarie will do your tax calculation and deduct it from the sale proceeds and pay it on your behalf , very kind of them ! The notarie is basically the tax collector , but is also legally obliged to do so , if you think the figure is wrong it's up to you to take it up with the tax office after the sale . This seems to confirm what my Notaire told me. Any work not supported by a French tradesman invoice, presumably with TVA paid, is not included.
The current rate of CGT is 19%, plus you also pay Social charges of 17.2%
I managed to write the furniture into the deal to avoid some tax , but your buyer needs to be on the case with you if you do this , you'll have to provide a list of items and values , if you have invoices all the better .
Basically you'll pay the difference between purchase and sale price with only French trade supplied services taken into account , you'll get no relief from anything you've bought and used
yourself .
On a side note , my personal experience was that the notarie likes to hold your funds in their account as long as they can , I stayed on in france after the sale until cleared funds went into my French bank account , I went to the notaries every day for 3 days to insist that they did the transfer .
Good luck .
The_Doc said:
Wait until you look at French Inheritance rules (not tax)
-they're crazy, everything gets split into chunks. Even if you write a will saying all property to your son (for instance), the state overrules it and gives some to other relatives.
Correct if you're French, but luckily if you're an expat you can make your will under the regime in your home country.-they're crazy, everything gets split into chunks. Even if you write a will saying all property to your son (for instance), the state overrules it and gives some to other relatives.
brickwall said:
3 days? Try Switzerland. I heard of a case of over 30 days!
I was already aware of the possibility of it happening, it was only three days as I made it fairly clear I wasn't going anywhere without cleared funds in my French bank , if I hadn't it would have been a lot longer , I speak from experience from the first time I sold . Once you've left the country it's difficult to argue your case over the phone , standing in the office being a pain in the arse is much more effective. It's a common problem apparently . I was given all the usual " the person that does the transfer isn't in today , there's a problem with the computer, I'll do it this afternoon " excuses , they asked me when I was leaving to which I replied " when the money shows in my account " that seemed to work !
One other thing to keep in mind , if your using a transfer company , and I suggest you do , make sure the account is set up and available to use on demand , bank poplaire pushed hard for us to take their exchange rate into our English account , our transfer company needed all sorts of id to prove what was going on . It worked in our favour as the exchange went up , but at least if your already sorted you can do it on demand almost .
Also your notarie will supply you with two statements as to why you have a large transaction in your account for the bank and to enable you to cancel your house insurance contract .
Also your notarie will supply you with two statements as to why you have a large transaction in your account for the bank and to enable you to cancel your house insurance contract .
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