Questions on Capital Appreciation

Posted by admin in Property Investment, Property Letters, The South of France | September 12th 2005

A capital gain is the difference between the original price and the eventual sale price. The expenses of the purchase and the sale, and certain expenses incurred during the period of ownership can be deducted from the gain.

For non-residents –

EU Resident, Capital Gains Tax is of 16%

Non-EU member State resident, Capital Gains Tax is 33 1/3%

French residents selling their home might not be subject to CG tax, but only if the property was their principal residence.

There are cases where a gain made by selling a second home may also be exempt if a number of conditions are met, primarily that the individual does not have a principal residence or has not been resident in France for two years or more at any time.

Some kinds of improvements to the property might also be deducted, providing that the work was completed by a registered French company and it is supported by accounts. After five years of ownership the seller is allowed to add an additional 15% to the purchase price in place of the works.

Work that is deductible includes extending the property and renovations but does not include decorative works. There is of course much more details, and there are other things, but this is meant to be a sumary, not a guidebook!

A more detailed report on Capital Gains Tax is available on request, it is too broad and detailed subject to go into in any depth given the scope of this webpage

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