News from our agency Provence Luberon Sotheby’s International Realty

La PLUS-VALUE Immobilière in the Luberon

La PLUS-VALUE Immobilière in the Luberon

The taxation of the difference between the sale price and the purchase price

Make an added value! The dream of all those who resell a real estate. Except in a few situations, the surplus-value is taxable. And if one does not make their calculations in advance, one risks to deceive ... A surplus value property corresponds to the difference between the selling price and the price of acquisition of a property.

 

 

To determine the purchase price of your property, you are allowed to take into account notary fees. If you do not have proofs, these expenses are set at a flat rate of 7.5% of the purchase price. The purchase price may also be increased by the amount of the work you have carried out. Attention, justifying mandatory! Otherwise, if you have held your property for more than 5 years, these expenses are capped at 15% of the purchase price. The sale price must be reduced by the amount of agency fees and mortgage releases.

 

You are now able to calculate your taxable gain. Begin by subtracting the purchase price from the sale price. Then deduct from this amount an annual allowance of 10% beyond the fifth year of detention. Finally apply a fixed allowance of € 1,000 granted to all unconditionally. If a surplus value remains, it will be subject to a levy of 26%, including social levies (CSG, CRDS ...). Since the law of 30 June 2004, there has to be added 0.3% of solidarity tax to the autonomy of the elderly and the disabled.

 

Note that after 15 years of holding, capital gains are exempt. Since the amendment of the law, it is your notary who takes care of the declaration and the payment of the tax that will deduce directly from the sale price. Consider submitting all the elements to be included in the declaration. In the event of insufficiency, the administration may assess the taxable gain on the basis of interest,

 

The capital gains tax is now paid immediately, at the time of sale, and no longer with income tax. This withholding tax is a boon for the State, which will receive in 2004 the 2003 capital gains taxed on income tax and those on 2004 transactions! Thanks to the people who were not taxable: they are now certain to pay 26.3% of capital gains tax ... Moreover, whereas the abatement applied since the third year of detention, we must now wait 5 years.

 

Admittedly, it was only 5% per year, but it was always that ... A piece of advice, do not hesitate to ask a simulation to your notary before any sales project to avoid the nasty surprises.

 

THE EXEMPTIONS

 Sale of the main residence provided that you have occupied it for more than one year

 Selling price less than 15 000 €

 Transfer of a residence in France by a member of the European Community, subject to certain conditions.

 Sale of property held for more than 15 years in case of secondary residence.

 Sale by the holders of an old-age pension or a disability card, under certain conditions