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HELP!! Capital Gains

Posted by 007helen-182944 - Created: 16 years ago
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3 replies (Showing replies: 1 to 3)

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Posted by loulou2-190134 - 16 years ago

Managed to speak to english speaking notaire who said; although house has been only property owned since bought and will have been resident of France for almost a year at time of sale plus value will be due as have not filed first French tax return yet - first french tax return being a year in arrears will be due next January, so will be filing on time but she said even then it is a risk! I presume because tax bill doesn't arrive till June as no French taxes will have been paid (though declared) at point of sale.

Looks like they are tightening up and we will just have to grin and up with it i suppose. Our property is being sold fairly cheaply - 73,000 euros, though we have not done much work we can deduct and price rise of almost 40,000 euros is just due to rapid rise in price of property (unfortunately this puts us in a nasty situation as we need to buy our next property - still in France so 'profit' is eaten up immediately. Does anyone know if there is some nice allowance we can claim? Perhaps properties under a certain value are exempt...some hope!    

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Posted by Seeker-184579 - 16 years ago

Helena,

Having bought and sold a house here within 3 years of arriving in France and gone through the whole capital gains question with a Notaire (and believe me, I'd worried about the large amount of theoretical plus value on paper, as the orginal vendor had insisted on my paying a large cash sum as part of the price at the time of purchase so that he could save a maximum of tax on what was his 3rd property!), I can report that no capital gains tax was due as long as this was indeed my principal residence at the time of sale. The only thing I had to declare was my change of address!

And, if you're filing a tax return in France in early 2004, this should be in respect of income earned in 2003 (which would logically include any potential capital gains realised this year [assuming you sell your house this year]), so I see no problem in your case.

The point is, tax is due in relation to the year of the 'gain', i.e. the year of sale. Your country of tax at the time of purchase shouldn't come into it. 

Hope this helps (although I hasten to add, of course, that I'm not a lawyer!).

Seeker [<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

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Posted by ivi - 16 years ago

I think the law is a little complicated on this issue.  You should talk to a notaire before selling to make sure where you stand.  Normally you can sell a principle place of residence at any time without capital gains provided it was your place of residence from the time of purchase to the time of sale.  Otherwise you have to have owned the house for at least five years and it should have been your principal place of residence at some time during those five years.  Foreigners have to have been resident in France for tax purposes for at least a year (it doesn't matter if you haven't done a declaration yet) to qualify for exemption. 

Talk to a well prepared Notaire before doing anything.  Otherwise search the internet.  I found useful information there.

Good luck.

Ivi