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 10 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