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New French Capital Gains tax - 2013

The New Capital Gains Tax recently came into force and is good news for property sellers. It means that instead of having to wait for 30 years to be free of CGT you now have to wait only 22 years for the most part. As an additional boost to the market there is a further 25% off for one year only. This offer from the Government ends on Aug 31 2014 so if you are toying with the idea of selling your French Riviera property it's best not to delay for too long.

This new regime is not applicable to building land or to companies owning property. Please feel free to contact us info@attikainternational.com for assistance on calculating your CGT and we will get an English speaking representative to calculate it on your behalf.

Please note that for EU citizens the CGT is 19% for the tax and 15.5% for the social contributions making a total of 34.5% rate of CGT. We give an example further down, For Non Eu residents the rate is higher at 48.83%. For French residents who are selling their principal residence there is still NO capital gains to pay

Firstly calculate your gain (there are various amounts you can deduct such as agency commission paid on purchase and on sale plus certain works with receipts that you may have carried out) but the gain is the difference between the sale price and the purchase price.

Next see how many years you have owned the property and look at the percentage you are allowed to subtract on the table below - look at the 2nd column. So if you have owned the property for 10 years you can subtract 30% (ie if you have made 100.000 Euros you are basing your calculations on 70.000 Euros)

french capital gains tax 2013

Example : An EU resident is selling their villa after owning it for 12 yeears. They have made 205.000Euros on the property. Please note there are 2 calculations you have to do or 3 calculations if you have made over 50.000 euros on your gains

1/ FIRST CALCULATE THE REVENUE TAX WHICH IS AT 19%

       12 years of ownership allows 42% reduction as per table above and so the tax is 58% of 205.000 euros = 118 900 Euros

      For this year only there is a special 25% further off the price of the property's gains = 89 175 Euros

      Tax of 19% on this amount is therefore 16 943 Euros

2/ NEXT CALCULATE THE SOCIAL CONTRIBUTIONS WHICH ARE AT 15.5%


   12 years of ownership shows a rebate of 88.45% (see column 5 above) so 205.000 x 88.45% = 181 323 Euros

    For this year only there is a special 25% further off the price of the property's gains = 135 992 Euros

    Social contributions at 15.5% - 135 992 x 15.5% = 21 079 Euros

 

3/ The property in this example has gained over 50.000 euros and so there is an additional tax to pay which is calculated using the table BELOW

Basis for the calculation is the amount in calculation one ie 89 175 Euros

Tax - 89 175 x 2% = 1784 Euros

THEREFORE THE TOTAL TAX FOR THIS RESIDENT IS 16943 + 21 079 + 1784 = 39 806 EUROS

TABLE FOR CALCULATION OF TAX IN 3RD CALCULATION-applicable only to properties with more than 50.000 euros gain

 

You will find further help, in French, on the site www.sarf.fr

The calculations really do need to be done on an individual basis so please do not hesitate to contact us directly info@attikainternational.com for assitance