Even though property prices have been falling for over a year and a half, you may make a capital gain if you sell an apartment or a house and it will be taxed. Today, only the main residence and sales of less than 15,000 euros, or 30,000 euros for a couple, are exempt from this tax.
The calculation of the amount of the taxable capital gain depends on the “corrected” prices, at the time of the transfer and the previous purchase. Thus, the sale price indicated in the notarial deed of transfer must be reduced by the costs that you have incurred, as the owner, to conclude the transaction. This mainly concerns the expenses for the certificates and mandatory diagnostics and, possibly, for the mortgage discharge. Small tip: if you are selling a home with a fitted kitchen or furniture, transfer them separately because their amount will not be included in the calculation of the capital gain. The price indicated must be justified – invoices, appraisals, etc. – and this equipment must be mentioned separately in the deed of sale.
The corrected purchase price corresponds to the previous gross acquisition cost, to which should be added the costs that you paid at the time: registration fees, notary fees, etc. If they cannot be justified, it is possible to increase this amount by a flat rate of 7.5%. You can also add expenses for work carried out on the property after the purchase – renovation, construction, extension, rehabilitation -, always on invoices. Simple decoration expenses are excluded.
Good to know: if you have owned your property for more than five years, the tax authorities will grant you a “works allowance” which corresponds to 15% of the purchase price, without having to produce supporting documents. Do the math, because it is sometimes more interesting to opt for this amount than for the deduction of actual costs.
Twelve-month rolling reductions
The difference between the corrected sale price and the corrected purchase price gives the net taxable capital gain. Various deductions for holding period then apply. One of the leaders of the Modem, MP Jean-Paul Mattei, has proposed, so far without success, to remove them. But this measure could return to the debates during the next budget. There are currently two scales: one for tax at 19% and another for social security contributions at 17.2%. Be careful because the deduction is calculated not by calendar year but over twelve rolling months. Thus, if you bought your property in May and you sell it in April, you risk losing a year of deduction. If possible, postpone the signing date by a few weeks to optimize the discount.
Last point: if the amount of the taxable capital gain exceeds 50,000 euros, you must also pay a capital gains surcharge. Its rate varies between 2% and 6%.
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