stgreg
Blogger
Share this content
0
2
1455

French Capital Gains Tax

French Capital Gains Tax

I believe that if a non resident owns a house in France he is not entitled to exemption from French CGT after 20 years of ownership as a French resident would be

Is this correct? and what is the rate of CGT payable?

Replies

Please login or register to join the discussion.

avatar
24th Jul 2012 16:22

The applicable tax rate is 19%,
In relation to those from the UK, then a liability does arise in the UK, but with any French tax paid set off against tax that may be due in the UK.

Regards Peter

Thanks (0)
By kdauda
30th Jul 2012 22:35

French Capital Gains Tax

There are various exemptions (totally unrelated to lenght of ownership) for French residentsn on the sale of their house, including notably 'principal residence' exemption. French residents do no pay CGT on the sale of their principal residence regardless of length of ownership.

 

I belive the exemption you're referring to is the result of the calculation of the net capital gain. A series of abatements are applied to the gross capital gains which means that the net gain is reduced to nil after 30 years (not 20 years) of ownership for disposals from 1 Feb 2012 (before 1 Feb 2012, it was 15 years). All individual taxpayers, including non French residents are entitled to this '30-year ownership' exemption.

 

The normal CGT rate for non French residents is 33.33% reduced to 19% for EEA residents (or if Double Tax Treaty with France states the rate) and increased to 50% for certain 'non-cooperating' countries.

 

There is an exemption (again, unrelated to length of ownership) available to non French residents who sell their house providing the following conditions are met:

1. The taxpayer is an EEA national which includes UK (possibly for some other nationals, but we won't go into that here).

2. The taxpayer was resident in France for a continuous 2-year period at any time preceeding the disposal. This can be proven by producing tax bills.

3.The property has been available for the taxpayer's occupation since at least 1 January of the year preceeding the disposal (essentially if it is not rented out).

4. The exemption applies to just one property. Once this exemption has been claimed for one property, it cannot be used for any other disposals at any point in time.

Thanks (0)