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Tax liabilities when selling property?

Posted by bjm - Created: 16 years ago
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9 replies (Showing replies: 1 to 9)

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Posted by me_2003 - 16 years ago

bjm...how does this work your main residence is in France...guess you can only have one main residence in the world?

and you are taxed in the UK?  If you are a resident of France then you must pay income tax in France or at least declare all gobal income in France, even if it is taxed aboard...

the reason why i am asking that i know someone else in the same position and they declare everything in france...i.e. main source of income is not is france but are a resident of france...

maybe they are doing it wrong as it would be better to be taxed in the UK...


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Posted by bjm - 16 years ago

Thank you all for your responses.

I bought this as my main residence but all my tax liabilities are with the UK as I receive an income from there.

Rob, I think getting a professional to make the calculations for me before I sell, is a good idea. Thanks.

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Posted by Rob-180901 - 16 years ago

Dear bjm,It depends on how you bought your property. If your property was not purchased as your ‘residence principal’, you will most certainly be assessed for ‘plus values’. This is a certainty due the five year clause on second homes. If you buy a property in France as a second home and subsequently move into it, the French tax authorities will not deem it to be your principal residence until you have lived there five full French tax years (Jan to Dec). Since you say you have lived here one year, it appears this would make you assessable.However, if you purchased it as your ‘residence principal’, then it should not be assessable for any capital gain. Whether this is the case becomes interesting, as under the last French budget, the rules on how capital gains were assessed were changed. (note the links to the rules in English provided by “me_2003” are not up to date.) Not only were the rules changed on rates and method of application, but how (or by whom) they were assessed. The notaire is now judge and jury and is responsible for calculation and collection on capital gains tax. Therefore, if you can convince your notaire this is your main residence then you may ‘get away with it’, since what he decides is the final word. With regard to the ‘Carte de Séjour’, these are certainly still available, however, you are no longer obliged to have one if you are a EU citizen. The prefectures are very happy with the new ruling as it means less work for them and will go to great lengths to ‘dissuade you’ from applying for one. However, they can only refuse you if they believe you are a danger to the public. Demonstrating you are in the system, basically means, having completed a tax return and ideally have been paying tax. Be registered at the CMU and finally you can, if you want, get a Carte de Séjour. If you do all this and can convince your notaire that it is your principal residence, then you may be able to avoid being assessed. Before you go through all this, do you know what any tax bill would be? Have you had a professional work it out for you, noting all and any allowances you may be able to apply to the calculation? If not, you might want to do this first, even if you believe that the gain in huge. I hope this helpsRob

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Posted by telim - 16 years ago

hey, trust me you are liable to pay.  if you really want to know just read the info on the french goverment impots site.


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Posted by gone2spain - 16 years ago

The notaire I used told me that if you have paid income tax in France at least once and you sell the house within a year of leaving France then you don't have to pay plus-values.

The best thing to do is go and see the notaire before you sell and get his agreement that you will not pay plus-values.

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Posted by Pervinca - 16 years ago

You get so many different opinions... I'm thinking of selling my flat & I was told that i n order to avoid CGT it must be your primary residence and also that you must have filed a tax déclaration in France  for 2 years.  This is the first time I have done it  because I worked last year in France, but the year before I paid income-tax in Italy where I had worked.  Does anyone know if the dual-treaty comes into force here, surely you don't have to pay income-tax twice?  And is it possible to make a retrospective déclaration?    Sigh!  Why is everything so complicated here!


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Posted by me_2003 - 16 years ago

when you file your taxes each year in France you have to state your primary residence...this is the address that you are taxed at...

bjm...i guess you are not doing this? correct? hence the french state does now this is your primary residence......you could be renting in abroad or living with your parents and this will be your primary residence...

i think what theswan said applies only if you live in your primary residence for 3 years...

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Posted by Theswan-186225 - 16 years ago

CGT isn`t payable on the profit made on the sale of your principal residence in France, provided that you have occupied it since its purchase. You would also be exempt if you are forced to sell for professional or family reasons ie: transferred abroad by employer etc

I`m not 100% sure what the situation is with regards to Carte de sejour, particularly as (like you say) apparently we do not need them anymore.

Good luck