YOU RESIDE OR ARE ESTABLISHED OUTSIDE FRANCE AND YOU SELL :
- a real estate property located in France,
- securities of a partnership (SCI) whose assets consist of properties located in France,
- predominantly real estate company securities (company whose assets consist directly or indirectly more than 50% by properties located in France, property rights or securities of other predominantly real estate companies);
- securities of not predominantly real estate companies in certain cases. Non-residents are subject to a withholding tax on capital gain, subject to international treaties, if the rights in the profits of companies with their spouse, ascendants and descendants have exceeded 25% at any time during the five years preceding the sale or whatever the percentage of their participation if they reside in a non-cooperative State.
A STATEMENT OF CAPITAL GAIN SHOULD BE ISSUED.
A non resident is not required to submit a declaration of capital gains when the sale price does not exceed 15 000€ or when the property is held since more than 30 years .
You need to appoint an accredited tax representative by the tax authorities :
- If you reside in a country outside the European Union that has not concluded with France a convention on administrative assistance in the fight against fraud and tax evasion,
- If the amount of the sale of the property or predominantly real estate company securities exceeds € 150,000.
hOw do you CALCULate the capital gain on the sale of a real estate property ?
Sale price, reduced by:
- selling costs incurred by the seller (agency commission, tax representation fees, mandatory diagnostics costs, etc.)
- purchase price
- acquisition costs (agency fees, legal fees, registration fees). When the transferor is an individual, it is possible to replace the actual costs by a flat rate of 7.5% of the purchase price.
- construction expenditures, reconstruction, expansion and improvement for their actual amount. When the transferor is an individual and if the property is held for more than 5 years, it is possible to replace the actual amount of costs by a flat rate of 15% of the purchase price.
Please note, expenditures for maintenance and repair work designed to maintain or restore a building in good condition and allow normal use without changing the consistency, layout, or initial equipment are not deductible.
Where the transferor is an individual, the gross capital gain obtained is then reduced by an allowance per year of detention beyond the fifth year of detention.
Where the transferor is a legal person established in a country outside the EEA, the acquisition price is reduced for constructed buildings (excluding land) by a depreciation of 2% per year of detention. The capital gain is increased accordingly.
The net taxable capital gain is thus obtained, on which applies the withholding tax and, where appropriate the additional tax on capital gains in excess of € 50,000 and social security contributions.
what are the most frequent cases of exemption from the capital gains ?
- Holding period (calculated from date to date) of a property or shares in predominantly real estate company over 22 years for tax section and 30 years for the section of social security contributions, where the transferor is a natural person,
- Amount of the sale on a building or shares in predominantly real estate company less than € 15,000,
- Sale of a dwelling located in France by individuals not resident in France, nationals of a Member State of the European Union or another State party to the agreement on the European Economic Area (EEA) which has concluded with France a convention on administrative assistance in the fight against fraud and tax evasion.
This exemption applies within the limits of a residence by the taxpayer and € 150,000 of taxable net capital gain to the double condition that:
- The transferor has been fiscally domiciled in France continuously for at least two years at any time prior to the assignment;
- The transfer occurs later than December 31 of the fifth year following the transfer by the transferor of his tax residence outside France, or even immediately if the transferor has the free disposal of the property at least since 1 January the year prior to the transfer.
WHAT CAN WE DO FOR YOU ?
WE HAVE A GENERAL ACCREDITATION OF TAX REPRESENTATION delivered by the tax authorities for real estate gains,
We act as fiscal representative for residents in a country outside the European Union that has not signed with France a convention on administrative assistance in the fight against fraud and tax evasion, and can act as a simple tax agent for residents of other countries,
We review the file and WE CALCULATE THE AMOUNT OF THE CAPITAL GAIN.
WE PREPARE THE STATEMENT OF TAX on capital gain,
We perform PAYMENT OF THE WITHHOLDING TAX and, if applicable social security contributions if this is not made by the notary,
We MONITOR RELATIONSHIPS with relevant tax authorities, until the stage of the claim, if any; ;
Do not hesitate to contact us for any question or assitance !