Capital Gains Tax in France
The regime de plus value des particuliers is imposed on anyone who is domiciled in France when assets are sold, but their primary residence is exempted. But the tax is invariably applied to those selling French property who are domiciled abroad.
The tax is levied at 33%. The capital gain is deemed to be the difference between purchase price and sale price, but the seller can offset:
- The supplementary costs of making the purchase, or 10% of the purchase price -whichever is the greater.
- An indexation of the increase in property values calculated according to government figures.
French law demands that foreign sellers employ an agent to handle the sale. This agent (normally a notaire) is responsible for paying the tax to the government. It is possible to get clearance for payment before completion. This is highly recommended. It saves time and paperwork and will reduce the fee the agent charges for his services.
In practice the capital gains tax payable on a property sale is likely to be modest or non existent for many sellers. But those who improve property considerably, or create new residential units (such as an integral independent granny flat) are most likely to find themselves paying for the privilege. The tax is designed to catch foreigners who are systematically renovating French property for profit.
