Leaflets

ARE YOU SELLING A PROPERTY IN FRANCE ?

1 – Are you a “non-resident”?

Yes, if on the day of the sale you pay tax on all your income elsewhere than in France.

2 – What are the rules for individuals selling a property in France ?

If you have owned your home for less than 30 years*, you must:
• File a capital gains tax return, even if you have no tax to pay;
• Appoint a tax representative, if your share of the selling price exceeds € 150,000 and you reside outside the EEA**;
• And pay the tax which amounts to 36.20% of the taxable capital gain.
• Plus an additional tax when the net taxable capital gain exceeds € 50,000.

3 – Are works deductible ?

Yes :
• For buildings: at a flat-rate of 15% of the acquisition price, from the 5th year of ownership (if works have been done).
• For (re)construction, extension or improvement works: if carried out by a registerer builder, with invoices and proof of payment in your name (renovations, maintenance, materials and works that have already been deducted are excluded).

4 – If furniture is included in the sale, how is the capital gain calculated ?

Based on the selling price excluding the furniture, provided that the value is justified (invoices or professional valuation).

5 – Are there any tax exemptions ?

Yes, under certain conditions, including :
• Up to a limit of €150,000 of net taxable capital gain, if you are a national of the EEA**, you have been a tax resident in France for 2 consecutive years, you have not rented out the property since 1st January of the year preceding the year of sale (unless the sale takes place within 5 years of you no longer being a French tax resident) and if this is your first taxable sale since 01/01/2006;
• If you draw an old age or disability pension (depending on the income threshold).
• If you have owned the property for more than 30 years; if the selling price is less than € 15,000; in case of expropriation.
Consult us for a full list of the conditions to be satisfied and the other possible cases.

6 – What are the specific conditions for French sociétés civiles ?

Appointment of a tax representative is mandatory if the total share sold by non-residents from outside the EEA** is higher than € 150,000 and if any partner is a foreign company.

7 – What about foreign companies ?

• A fiscal representative must be appointed for companies headquartered outside the EEA, without exception.
• Specific method of calculation: the fixed rates of 7.5% and 15% do not apply; the purchase price (of buildings) must be amortized.
• The exemption for ownership for more than 30 years is NOT applicable.
• The capital gain is taxed at the rate of French corporation tax.
• Only (re)construction and expansion works are deductible (invoices and proof of payment in the name of the company).
• Specific rules apply to EU companies.
• The tax representative also guarantees the payment of the annual 3% tax, which is calculated on the market value of the property(art. 990 E of the CGI) (non-EU companies).

8 – What can happen afterwards ?

• Your return can be audited up to four years later (or even longer).
• Your tax representative will have to justify the calculations and defend your case.

9 – What do tax representatives do ?

• They sign your capital gains declaration.
• They guarantee its accuracy.
• They undertakes to pay any extra tax and penalties in the event of an adjustment.
• Their liability is unlimited.

10 – Who can be your fiscal representative ?

• Either a professional approved by the French tax authorities.
• Or, with special approval, a person who resides in France. The approval decision takes a certain amount of time in order to verify the tax situation of your representative.
Neither your notary nor your lawyer can act as your fiscal representative (BOI-RFPI-PVINR-30-20-20120912 § 30).

11 – What are the specific advantages of being represented by SARF ?

• The benefit of expert advice and follow-up based on 30 years of experience.
• Your file is processed within 24 hours.
• The competitiveness of being the leader in the profession since 1983.
• You have only one contact, your personal advisor, who is a specialist.

12 – How is Sarf paid ?

We charge a fixed fee which paid out of the proceeds of the sale. It is deductible from the selling price as a charge.

* When selling land that you have built on within the last 30 years, or when selling a property owned by a foreign company, you must file a return even after more than 30 years of ownership.
** Liechtenstein: specific rules apply