Capital Gains Tax on Property Sale?

I was looking at a property, a small house, which has a separate large plot of land with a stone barn. If I was to buy the property, as the house has its own garden, I wouldn’t really have much use for the barn and the land on which it stands. If, on purchasing the property, I was to immediately put the barn and land up for sale, would I be subject to CGT or similar on the monies received from that sale? I read that if you sell a property after 5 years of ownership you don’t pay CGT, but in the case I have outlined, I would be (hoping to) sell straight away. What do you think?

Obviously, I don’t know where you’ve read this, but I don’t think it’s correct… under 6 years there’s nil abbatement… (maison secondaire)
According to the link… there would be total exemption after 30 years…


https://www.notaires.fr/en/capital-gains-tax-property-0

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years ago, I read about someone Buying and re-Selling on the same day/same notaire and no CGT was involved…
as I say, that was years ago and things might have changed. However, to buy something with a view to putting part back onto the market… that wouldn’t fit the (CGT Zero) criteria in my view

Your notaire would be the best person to ask.

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Do you know that you are able to do that? Certainly in and around our part of L&G we have gone through an elaborate exercise where certain parts of the commune have been designated agricultural and it’s not that easy to get permission to build or to convert barns into additional dwellings.
Might be worth checking with the local mairie just to make sure.

I realise the thread is about Capital Gains Tax… but a slight detour is advisable…
As others have said… and I’ve mentioned elsewhere on several occasions… before Purchasing anything… go to the Mairie and discuss with them your thoughts/plans for the future.
They should be able to advise you whether a “project/idea” is feasible or not and what documents etc etc might be needed…

Talk with the Notaire re CGT implications…

Do ensure that you understand every single word of what is going on/needing to be done … before you agree to buy anything…

best of luck…

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I doubt it, unless you sell it for more the you have paid for the whole property you haven’t made a gain, If you buy the whole property for 100 and sell the barn etc. for 50, no gain. if you subsequently sell the remaining bit for 25, than a capital loss of 25 on your initial purchase, if you sell it for 75 then a 25 capital gain.

As Stella points out there’s a sliding scale on CGT and Social charges (not aligned BTW).

Actually, this is not quite so easy.
We bought a house/garden/garage/garden.
Subsequently sold the house/garden… dividing up a plot.
The Notaire handling that sale, decided the value/proportion of purchase price to be allocated to the garage… and then figured out whether or not we’d made a profit by selling the bits we subsequently didn’t want…
that might not make sense, how I’ve written it… but, sadly, the way the Notaire explained things, it made absolute sense… aaargh.

Yes, I was afraid that there could be some weird allocation applied, but I’d fight my corner on it :slightly_smiling_face:

Absolutely…
We hadn’t intended to sell the house but got landed with the tenants from hell and were left with no choice…
At least we kept the garage (hurrah)

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Ahem that’s why you ask the notaire…

Please don’t be offended but are you perhaps looking at this from an English perspective.
Ask yourself why the vendor has not done what you propose. Surely they have already looked into how they can maximise income from the sale and realised for whatever reason that the barn and land has no value if sold separately.
There is land and barns aplenty in France that are of little use to anyone.
Ask yourself how much the house and garden would sell for without the land and barn and the answer is likely to be exactly the same.
My guess is the vendor just wants to offload it and is using the barn etc to make it look like a good deal.
Its a great idea to think you could sell off the barn and land but this is France and property doesn’t sell over night.

Barns are always useful. We had an empty one when we arrived…not so much as a rusty screw left behind. It is now full. So don’t be too quick to think you have no use for it. Is there space elsewhere for your trailer, ride-on mower, table tennis table, inflatable hot tub, left over materials from renovation, dog agility equipment, winter tyres, etc etc?

The other point is that it will cost you a bit to divide the and up to be able to sell it. You will need a géometre. And I hope there isn’t shared access, or any of your services crossing that land as that can be a minefield.

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Have you been snooping in our barn🤣

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They mine the shared access? - surely the ultimate neighbours from hell! :slight_smile:

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When it comes to tax, I prefer to only ask tax officials questions I know the answer to, if possible :face_with_hand_over_mouth: For example, I’ve had conflicting advice on succession planning from two notaires, both very nice people that I’d used very satisfactorily for other matters.

@Sandcastle Yes that makes sense, it’s a more elegant version of my if you buy for 100….

Ahh, is it a chicken or egg situation though. I find the more space I have the more “stuff” I accumulate. That includes a study full off books, a garage full of tools, a cave full too. I recently put a concerte floor into a sous sol and it mysteriously seems to have become chock-a-block. Heaven knows what I’d acquire if I had a barn. A classic motorbike, or two, a quad, a classic car or two, probably needed restoration which will never happen, small boat?

Thanks everyone who has replied. You’ve certainly given me things to think about. To answer one or two of the points raised:

The barn and its associated land are separate from the house. The house has its own adequately-sized garden.

The house has an outbuilding so I would have storage space at the house so don’t need the barn for storage - storage at the barn would be awkward as it is, say, 50 metres from the house.

The access is not shared.

If I was to proceed with the purchase (not guaranteed at the moment as I am still looking into it) I was thinking of selling the barn and land regardless of whether or not the barn could be converted for living purposes, as I would simply have no use for it .

I would, of course, discuss the possibility of conversion with the Mairie before signing on the dotted line as it would obviously affect the attractiveness to me of the initial purchase and, subsequently, the market value and saleability of the barn/land.

Thanks for your inputs :slight_smile:

that’s clarified the situation.

and, using the info provided, you can work out for yourself just how much CGT etc you might end up paying