We've just heard about the recent changes in CGT tax rules in France which apply to the sale of second homes after 1/2/12. We are resident in France and have declared our french property as our primary residence since 2009. We were planning on selling our UK home next year, and had understood that we would not be liable to any CGT as we had owned it more than 15 years. However, under the new regulations, I understand that CGT is now payable on property owned up to 30 years. All of the information I have found on the web relates to selling houses in France and I am seeking advice on selling a UK property. eg how do the french authorities calculate the CGT on a foreign property. what allowances are eligible for extensions given that they were not done by french artisans.
Any advice gratefully received.
Hi Janet - can't email you direct so have sent request to connect. Otherwise, please email me on thewritersroom@yahoo.com
Cheers,
A
Rob is right in the sense that the measure has already been voted although the 1st October mentioned applies to the new rate for social charges. A sale can therefore occur until 31st January 2012 without being subject to the new CGT regime.
Janet is also right to point out that the measure may never be enforced if the Parliament voted an amendment to overturn the new CGT regime although, considering the Finance Budget Bill for 2012, such amendment does not appear anywhere.
I hope this helps.
Sounds pretty definite to me:
Annoncée par François Fillon le 24 août, la réforme de la taxation des plus-values immobilières a été entérinée par le Sénat. Impossible d'y échapper, à moins de signer chez le notaire la vente de votre terrain, résidence secondaire ou investissement locatif avant le 1er octobre 2011.
I was talking to a juriste yesterday who said that the new Acte has not yet been passed by the Senate - the Congress is left wing and was all for it, however the Senate is right wing and it is by no means cast in stone that the Acte will be passed.
hello Annaliza - please contact me
Is that what you are then?
Hi Maria, It all starts to get a bit complicated here. David Yeates has an excellent piece in French-property.com , below. Need to get your head round it though, and have blind faith that the tax office will know what you're talking about. You should be OK though if you stick to your guns.
Hi Angela, Or maybe even an IFA who is part if SFN?
Hi,
I'm Annaliza, editor of the magazine BritMag; we're looking to do a brief piece on these changes in the next edition - do feel free to get in touch (thewritersroom@yahoo.com) if you have strong feelings about this change or if it will have a big impact on you and your plans. I'd like to make sure readers are really aware of the personal effects of changes like this. Seems to me that this could have a huge impact in certain cases.
Thanks, Annaliza
Hello, My advice is to find a professional to give you financial advice. Most French Notaires/ comptables will only be aware of the French system, and most English accountants only aware of the UK one. So, Blevins Franks and Siddals for this sort of specialist tax advice are both tried and tested. I had a lovely accountant in the Dordogne who dealt with my tax affairs, who knew both systems, but he retired!
Hi Clare,
I agree with Rob. Capital gains on the sale of property in the UK by residents of France is now taxed under French capital gains tax rules.
You can find more about this at
http://www.french-property.com/news/tax_france/double_tax_treaty_ch...
and
http://www.french-property.com/guides/france/finance-taxation/taxat...
The regulations concerning an offset for building works are very vague, but also very limited. It is frequently a better option to simply take the 15% 'forfait' that is available.
Hi Rob, does this apply if we rent in France and still have our house in England rented out?? We wanted to sell our house after the present tenants contract has finished in May to buy a house in France. We have rented here for 3 years. Thanks.
By the way, Liz is right when she says that this doesn't come into effect until the 1st of Feb, but that does leave scant time to get a sale completed, even if you wanted to, especially if it is rented.
Hi Clare, I'm afraid that the most recent Double Taxation Treaty closed the loophole whereby French resident owners of second homes in the UK escaped CGT on sale, and since then the situation has been worsened by an austerity package passed by the French authorities extending the timeframe to 30 years from 15. Improvements done to the second home don't of course have to have been done by French artisans. English ones will do fine. It just means that you have to have receipted invoices for any work done (not just raw materials purchased). So if you had a new bathroom fitted for example, you can count that as an expense, adding to the cost of the property. If you want to mail me on info@france-financial.com with details of how much you paid and when, I'll be happy to estimate the bill for you.
My understanding is that the new 30 year rule doesn't come in until February next year. It might be worth trying to sell the house in the UK quickly as, depending on the capital gains tax to be paid, you might be better off selling at a lower price.
As always, your best bet is to go and speak to your notaire, who will give you free, up to date advice.