Selling your French property? Try our French capital gains tax calculator.
Rationale – say why this post is useful…[When selling a property there are many things to think about. This article explains some of the tax considerations and shows you how to calculate the French capital gains tax [blah blah]
Do I have to pay French capital gains tax?
[Mention about exemptions]
You may need to calculate French capital gains tax if you are:
A French resident selling a French property that is not their main residence.
A French resident selling real estate property held in another country (you will need to check the double tax agreement between France and the relevant country). The double tax agreement between France and the UK requires the sale to be taxed in both countries, with double tax relief available in the country of residence.
A non-French resident selling a French real estate property, for example a holiday home in France.
If I live in the UK do I have to worry about UK capital gains tax?
[say something about UK resident]
[say something about temporary non-UK resident – will have to pay UK CGT on return]
If you have to pay capital gains tax in both countries, then the double tax agreement between France and UK allows to take this into account so that you are not taxed twice.
How do you pay the tax?
In most cases in France, a notary must legally oversee the transaction. They must carry out certain legal checks and they are also responsible for calculating and deducting the French CGT and paying it to the tax authorities. The seller therefore receives the net proceeds after French CGT has been deducted.
[Talk about selling property outside of France if you are a French resident]
What you need to do the calculation
The sale price
[commentary e.g. deduct selling costs such as certain legal fees]
The date of sale
[commentary e.g. stated in sale deed
How you acquired the property
You may have acquired the property simply by buying it, but you may also have inherited it or received it as a gift.
The acquisition price
If you paid for the property, the acquisition price should be stated in the purchase deed. If you acquired it by inheritance or gift, the value when you acquired it will be stated in the deeds recording the inheritance or gift.
Costs of acquisition
Costs of acquisition include for example, notary fees, stamp dutye (droit d’enregistrement), VAT paid (if any), commission paid. If the property was purchased (therefore not acquired by gift or inheritance), then you can claim a flat rate of 7.5% of the acquisition price as costs of acquisition. This is handy if you have no records of the costs of acquisition or the costs of acquisition were lower than 7.5% of the acquisition price.
[say something about what as allowable and what is not allowable – must have evidence you paid i.e. invoices, cheque/bank statements]
If the property is being sold more than five years after it was acquired, then you can claim a flat rate of 22.5% of the acquisition price as enhancement expenditure. This is a very generous allowance which benefits those who do not have any records of enhancement expenditure or if the enhancement expenditure is lower than 22.5% of the acquisition price – the allowance is available even in the absence of any enhancement expenditure.
Example calculation of French CGT
[show an example calculation]
Try our French cap
Tax calculations can be complex. You can use our French Capital Gains Tax calculator to do a simulation but this should be treated as a guide only. [link to French CGT calculator].
Where can I get more help and advice?
Selling a French property is very much the domain of the notary, but you may require help to get you through the process, for example there may be a language problem or the notary is unlikely to be aware of UK tax considerations or just generally knowing that there is someone looking out for your interests. If you would like further help or advice on French Capital Gains Tax you can contact Kehinde Dauda via our contact form