Further to my earlier post below, the French government has announced a final (hopefully) revised version of the proposed changes to the rules on Capital Gaisn Tax (CGT) applied on the sale of a second home in France, that is not classed as 'your main and principal residence' for tax purposes. The new proposals are as follows:
- 2% abatement of CGT for each year if the property is sold between 5 and 15 years since first purchased
- 3% abatement each year during years 15 to 25
- 10% abatement each year during years 25 to 30
This replaces the former 10% per year applicable after five years of ownership, in years 6 to 15 inclusive, making the property free of CGT after 15 years of ownership. This is now effctively after 30 years of ownership.
The rate of tax (and a special social charge) is 32.5% of the capital gain - the difference between what you paid for the property and the price at which you sell it.
The new rules will apply for all notarised transactions after 01 February 2012 (and not earlier as announced).
If you are tax resident in France (for example, file an annual French tax return) and your property is classed as your main or principal residence, no tax is paid on the 'profit' (capital gain) when you come to sell.
Source: LeParisien, 07 September 2011.
- 2% abatement of CGT for each year if the property is sold between 5 and 15 years since first purchased
- 3% abatement each year during years 15 to 25
- 10% abatement each year during years 25 to 30
This replaces the former 10% per year applicable after five years of ownership, in years 6 to 15 inclusive, making the property free of CGT after 15 years of ownership. This is now effctively after 30 years of ownership.
The rate of tax (and a special social charge) is 32.5% of the capital gain - the difference between what you paid for the property and the price at which you sell it.
The new rules will apply for all notarised transactions after 01 February 2012 (and not earlier as announced).
If you are tax resident in France (for example, file an annual French tax return) and your property is classed as your main or principal residence, no tax is paid on the 'profit' (capital gain) when you come to sell.
Source: LeParisien, 07 September 2011.