Sunday, 18 September 2011

Sunday, 18 September 2011

New Capital Gains Tax rules - impact on some vendors

It is not yet widely appreciated, but there are significant changes planned for Capital Gains Tax rules for owners of a maison secondaire in France. Previously, after a 5 year qualifying period, owners were allowed a 10% reduction in their liability, for each complete year of ownership, until after 15 years the property was deemed to be free of tax. The 15 year rule has now been extended to 30 years with smaller allowances in place. The new rules apply to all sales concluded after 31st January 2012. If the property is owned by a SCI (property holding company), the rules have already changed, (effective from 25th August 2011). A summary of the rules is aavailable from us upon request. You may need to discuss the implications of the new rules with us. We envisage that some owners, especially those who have owned a 2nd home in France since prior to 2007 will have financial implications as a consequence of this legislation. Those who have owned for even longer periods may have believed that they were now outside the Frencg CGT calculations. There could be a significant opportunity for owners to sell prior to the 31/01/2012, which generally would require a sale to have been agreed, (and a compromis de vente signed), by 31/10/2011.
Peter Elias (Agent Commercial) http://www.allez-francais.com/
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