Each week Sharon Scott of local estate agency 2 Valleys Properties shares a really useful, interesting and helpful guide to ex-pat life in the mountains. You’ll find the full back collection of Sharon’s blogs on our website, and on Sharon’s Facebook page.
This Week – Capital Gains Tax
This Friday Freebie concerns Capital Gains tax for RESIDENTS in France. I will do another one next week for NON RESIDENTS.
RESIDENTS are exempt from paying capital gains tax in France. This includes the tax on the sale of any outbuildings, barns, workshops or garages (unless they have been converted into living spaces).
The law actually doesn’t mention how long you have to have been a resident, in order not to pay the tax, however the tax authorities aren’t that stupid! If you have a control when selling your property, you will have to be able to back up with evidence that you have been living in the property and nowhere else for a reasonable period of time. Eight months seems to be the generally accepted time period for this and the authorities will have expected you to have made an income tax declaration during this period at the address, so that you should be able to produce your taxe d’habitation bill in your name. You should also be able to prove that you have been living there on an habitual basis up to the time of the sale.
If you intend selling part of the land (or any other buildings) that the property is on separately then you would have to pay capital gains on this.
If you live in two properties in the year, then you would preferably need to have previously notified the tax office which of the two you declare as your primary and main residence.
If you in the process of getting divorced or separated there is an exemption for these couples, one of whom may no longer be living in the family home when it is sold. Where one of the parties stays in the property until it is sold, both benefit from the exemption. This also includes couples in a civil partnership.
Every case of capital gains is different and it is difficult giving advice on individual cases, the best bet is to get advice from your notaire and make sure you plan your finances in advance based on the information they give you.
Hope this has helped someone today. Enjoy the weather while it lasts!