If you are a tax resident in France or the EU
- You sell your principal home: there is no capital gains tax – CGT on main residence sale profits.
- If a part of your principal home has been let to gain income, e.g. a gite, that part is valued and will be subject to capital gains tax unless you stop declaring the rental income a year before the sale.
- If you sell your secondary residence you will be liable for CGT on the profit upon re-sale.
The notaire handling the sale will calculate the capital gain and submit the CGT declaration.
If you are not a tax resident in France or the EU
- You sell your holiday home: you are liable for CGT on the sale profits.
- You will have to have a document from HMRC/your tax authority to prove you are part of the Social Security system in your home country.
- For sales of over 150 000 euros, you need to appoint a Fiscal Representative to calculate and submit the CGT declaration.
Capital Gains Simulator on the Notaires.fr website
How the “profit” is calculated
NET VENDOR SELLING PRICE
The sales price, before any agency fees.
minus
TOTAL PURCHASE PRICE
Computed as the purchase price of house (less any cost that was allocated to furniture purchases)
+ costs of purchase (notaire fees + agency fees)
+ cost of allowable building work.
Only certain work is allowed under the headings of Construction; Reconstruction; Improvements. Not included are replacing things that were already there or improving things already existing.
Only work invoices from registered companies/artisans are accepted, i.e. not materials you have bought to do work yourself or work that is considered “maintenance” e.g. decorating.
If you have owned your house for over 5 years, and have no or very few invoices, you can have a nominal amount of 15% of the purchase price allocated as building work.
equals
PROFIT
If you have owned your house for more than 5 years, you can benefit from a percentage reduction for each year of ownership (see simulator). Then capital gains tax is calculated on the profit at 19% income tax and 17.2% social charges. If you are not part of the French Social Security system, you can provide the document from your home country and you won’t pay the 17.2% social charges. If you don’t have the correct document, you can claim the 17.2% back when you receive your document.
Essential for all second homeowners
Keep all invoices and receipts from artisans – ensure your name and address of house in France is on the invoice.
Ask artisans for their 10 year insurance certificate – « assurance decennale ». This is the 10-year guarantee on major works; the notaire will ask for it on re-sale.
Keep proof of payment – original bank statements that show the invoice was paid.
