Author Ayan Ahmed

Blog Capital Gain in France

Ayanahmed1947@gmail.com

Introduction
In France, capital gain tax is likewise called impetus much less plus values and is a tax payable at the
sale of land or buildings, stocks and a few different private assets situation to any exemptions,
allowances and deductions. The popular capital profits tax at the sale of actual property is nineteen
in step with cent. Profits above 50,000 may be concern to surcharge beginning from 2% and growing
to 6% for income over 260,000. The end result is a most tax charge of 42.2% (including all social
charges) - however, there are numerous reliefs and exemptions, so that you do now no longer must
pay that plenty tax anymore. The present day social price for financing earnings and assets blessings
is 17.2%. If you're a member of every other EU / EEA health system, you're entitled to a brand new
charge discount of 7.5%. This applies to residents with Form S1 and non-residents making income or
income in France.

Concept
Capital Gains Tax – (Impeterless plus Valor) - is a tax levied on income from the sale of actual
property or houses in France. Capital advantage is calculated because the distinction among the
promoting rate and the acquisition rate or rate whilst the belongings is obtained as a present or
through inheritance. The policies governing capital profits tax range relying at the promoting rate,
the character of the belongings, the seller's use of the home, and the way lengthy the belongings has
been held. Capital profits from the sale of the belongings are exempt if the sale rate is much less
than € 15,000. Regardless of the duration of possession of the property, the sale of the basic
residence is completely excluded. Capital gains on homes sold after the property has been owned for
30 years or more are also excluded. In other cases, the seller must pay taxes and social charges (CSG,
CRSG) on the net capital gains.
Depending on the type of transaction, we can distinguish three distinct terms:
• Land and Buildings - Impôt on the most valuable real estate.
• Personal Property - Tax on the most valuable personal property.
• Shares - Impôt on the highest-valued mobilières.

Capital gains taxes in France

As is customary in France, two types of taxes are paid: capital gains tax and social levies. The known
rate of capital gains tax on property sales is 19%. For profits above 50,000, progressive surcharges
will be applied, starting at 2% and increasing to 6% for profits above 260,000. This results in a
maximum tax burden of 42.2% (all social expenditures included) but there are many reductions and
exemptions, so you don't have to pay much tax now, which is 17.2%. If you are covered by another
health system in the EU / EEA country, you may be able to take advantage of a new lower version
7.5%. It applied to residents who store the S1 and non-holder module.

Paying capital gains tax in France

When selling real estate, you must use a notary. They will calculate the applicable tax, withhold it at
the time of sale, and pay the tax on your behalf.
When a non-EU, Icelandic, or Norwegian resident sells property, they must use a tax consultant
approved by the French Tax Authority to prepare a capital profits tax declaration.

Taxable Persons
Despite the different policies, individuals and businesses are subject to capital gains tax. In this
review, we will focus on capital gains tax as it applies to individuals, not individuals who buy and sell
goods or property in a company such as a civil fixed asset company. (SIC). However, in our civil fixed
assets guide to the company, you can find out more about the taxation and other implications of
buying and selling real estate in SCI Real estate transfers are fully subject to the capital gains tax,
except individuals and individuals who are sold with the idea of a change of house and an annuity.
Properties that are gifted are not liable (though they may be included to gifts tax) and property that
are inherited in similar exempt (although it is subject to inheritance tax rules).

Tax rate on capital gains:

Capital gains are taxed at the current flat rate of 19% in income tax (with a linear abatement of 6%
from the sixth year) and at the current rate of 17.2% (one after the sixth year) of social
contributions. With innovative discounts)) The amount of tax is deducted from the sales charge by a
notary at the time of signing the common law, and the tax is paid to the state with subsequent
assistance. Capital gains on non-constructible property above €50,000 of land are subject to
additional tax (from 2% to 6 depending on the amount of capital gains after application of the
allowance). If we consider the capital gains generated by the transfer, January 1, 2013. A municipal
tax and/or a national tax may be levied on the sale of land now approved as building land (CGI art.
1529). (CGI Art. 1605 cpv). The capital equity regime varies depending on the sale price, type of
property and length of ownership. There are cases of limited exemptions given the concept of
taxation.

Calculate Capital Gains Tax

A simple capital gains tax calculation is a product of the amount of profit multiplied by the applicable
tax charge. Capital gain is the difference between the proceeds from the sale and the actual price of
the investment or purchase, also known as the value base. Traders must understand the protection
period to calculate the long-term capital gains charge.

 Determine the price basis: This is usually the purchase fee and any fees or costs associated
with the purchase.
  Calculate the amount received: This is the sale price of the investment minus any fees or
expenses paid at the time of the transaction.
 Subtract the cost from the amount found: The amount the investor paid for the loan is
deducted from the amount they sold. Calculate the capital gains on your investment.
 Determine the tax rate applicable to capital gains: For investments held for a number of
years, the investor uses a long-term capital gain rate (zero%, 15% or 20%).

Capital Gains Tax on Long Term Profits

Long-term capital gains tax is levied on profits from the sale of funded assets over one year. The
long-term capital gains tax rate can be 0%, 15% or 20�pending on various factors such as income
level and marital popularity.

Long-Term Capital Gains (LTCG) Tax Rates

Filing Status 0% LTCG Tax Income 15% LTCG Tax Income 20% LTCG Tax Income
Level Level Level

Single Up to $40,400 $40,401 - $445,850 Over $445,850

Head of Household Up to $54,100 $54,101 - $473,750 Over $473,750

Married Filing Jointly Up to $80,800 $80,801 - $501,600 Over $501,600

Married Filing Up to $40,400 $40,401 - $250,800 Over $250,800

Separately

Capital gains tax on short-term profits

The tax on income from the sale of financial assets for a period of 12 months or less is called a short-
term capital gains tax. The short-term capital gains tax rate is the same as the regular profit tax
charge. For example, if an investor's top gains tax bracket is 22%, their short-term capital gains tax
may also be 22%.

Land Divided into Plots for Sale

Lotissement is a French word that describes the process of dividing up land and buying land with the
intention of selling it for a profit. Any profit from the sale of the land may be subject to profits tax as
income from the exchange. assets are taxed at 19% (or 33.1%) if income is sold by a company that
disputes the terms of a double tax agreement.
If the land is not purchased for a specific purpose, any profit from the sale will no longer be taxed as
income from alterations, but profits made by individuals will be taxed as capital gains under the
general rules.

Capital Gains on Shares

Gains on movable property such as stocks and other financial assets are taxed at the household
marginal tax rate.All benefits are subject to a social cost of 17.2 percent.This carries a total tax
charge of 64.5% on movable property.

There is a typical taper measure of 50% for investments between two and eight years and 60%
thereafter.Therefore, if the taxpayer has held the stock for at least three years, 50 per cent of the
profits on the settlement will be taxfree and if kept for more than eight years, 65 per cent of the
profits will be taxfree.Is.These exemptions do not apply to social expenses, which must be paid at a
uniform rate of 17.2 per cent of the total benefit.

There are also more liberal exceptions that govern the sale of shares in small and medium-sized
enterprises (SMEs) established over the past decade and located in the European Economic Area
(EEA). This allowance applies to shares in EEA SMEs acquired by entrepreneurs after their retirement
as well as to shares purchased within the family. These shares may also qualify for extended cone
relief as set out below (which does not apply to payroll taxes).

Calculating the gain

Profit is the difference between the selling and buying commissions. You can deduct up to 7.5% of
the purchase price (or more if documented), plus actual development or improvement expenses not
already taken into account for income tax purposes and exclude recurring maintenance expenses,
etc.). Improvements must be carried out by registered contractors and proof of payment is required.

When the property is sold more than five years after the date of purchase, the improvement charge
can be calculated as a fixed amount equal to 15% of the purchase value. The seller does not always
have to provide proof of the charges actually made, nor to provide improvements or completeness.

Reductions and exemptions

Capital gains are exempt from tax if the basic residence is used as the habitual and actual residence
at the time of the sale. This is an "all or nothing" benefit and the benefit can be completely excluded
even on non-primary residence property for the entire period of ownership if it becomes a suitable
principal habitual residence at that time. Leaving a property unsold, on the other hand, can lead to
the complete loss of the concession at the time of sale, even if it has been the principal residence for
many years. However, if the property is offered for sale as a normal dwelling, the owner can have 12
months of living space even if he cannot live there.

Where a property that is not the main home is sold the gain may be exempt from tax if:

1. The character did not personal his or her primary residence for the four years preceding the sale
of the belongings,

2. The proceeds of the first sale are reinvested in the acquisition or creation of the character's
primary residence.
Other Moveable Goods
Capital gains tax is also liable on other moveable goods such as jewellery, antiques and works of art.

 Furniture
 Household goods
 Cars
 Other moveable goods where the proceeds are less than or equal to €5,000
 Other moveable goods held for more than 12 years

The profit decreases with the actual purchase cost and the development cost. In addition, the profit
is reduced by 5% for each year of completion of the property after the first two years and then
becomes zero after 22 years. Taxable profits are taxed at 19%, as well as 17.2% of social prices. The
taxpayer can opt for a special withholding policy for rechargeable items such as art, collectibles,
antiques, jewellery, and precious metals. Withholding tax of 10% on precious metals and 6% on
jewellery, works of art, antiques and collections. Social charges being distributed at a rate of zero,
5%, the total withholding tax is 10.5% or 6.5%.

Conclusion
Regardless of the wide variety of televisions in a belonging or the wide variety of residences owned
with the aid of the same family, solely one TV licence is needed per household.

The landlord is chargeable for paying the TV licence if you lease out separate lodging. Owners of
chambres d'hotes need to also pay a reduced licence fee primarily based at the wide variety of
televisions of their status quo. Licenced premises pay appreciably better price.

Reference
https://www.french-property.com/guides/france/finance-taxation/taxation/local-property-
taxes#:~:text=The%20tax%20is%20an%20annual,1st%20January%20of%20each%20year.&text=In
%20addition%2C%20Article%201459%20provides,principal%20residence%20of%20the%20owner.

https://www.greenbacktaxservices.com/french-property-taxes-non-residents-expats/

https://www.thelocal.fr/20211001/why-some-french-cities-are-increasing-taxes-for-second-home-
owners/

https://www.internationaltaxreview.com/article/b1tstr5trlqvv9/france-taxation-of-real-estate-
capital-gains-and-the-questionable-outcome-of-the-french-assimilation-process