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Information page—fiscal obligations

You are unlikely to be able to sell a new build property without the proper insurances in place ;

Decennial and the Dommage Ouvrage insurance, you will be asked to supply this at the point of sale by the notaire, if you have built the property yourself, or enlisted a builder who does not have sufficient insurance cover or provided you with the appropriate invoices you may be liable.

 

 It is also your responsibility to ensure that both the insurances and TVA at 19.6% has been paid on the construction of the new build if sold less than 10 years old.

Make sure your builders invoices can be deducted against French capital gains – don’t be tempted to save a few pennies in the build process only to find out that you pay more Capital Gains at the end ! DO YOUR HOMEWORK.

 

Watch out for Capital Gains Tax -  the conditions of acceptance of “renovation work” on a property are now very stringent. This must be carried out by a registered French artisan ( with an appropriate invoice) and invoices for materials you have purchased yourselves are not allowed.  In the event that you cannot produce invoices for renovation work carried out, and if you have owned the property for at least 5 years, however, the Notaire can apply a fixed abatement of 15% of the acquisition price in respect of improvement works on the building ( but not on the land).

Unfortunately, the previous possibility that you could have an “expert evaluation” of the work done, instead of producing invoices, no longer exists, so capital gains, for the “bricoleurs”, who have done all the work themselves, is now much more of a problem. Even so, all is not lost, since there has always been a significant allowance given for the length of time you have owned a property, which has seen major changes in recent years. There is no allowance for the first 5 years of ownership, but every year, from then on, allows you 10% off your capital gain, with the result that a property owned for more than 15 years is free of capital gains tax.

Whatever your situation, these rules show that the tax position of a British resident in France is always going to take some understanding. Taking professional advice has become even more important. N.B. The information given herein is for your information only and is of a very general nature and is by no means exhaustive or comprehensive. Legislation and Taxation is a complex area and you should not act or refrain from acting without comprehensive specialist advice on the facts pertinent to your project.