Capital gains tax exemption changes
Long-term owners win back capital gains tax exemption on sale of second homes as tough new scale of allowances introduced
PLANS to axe the capital gains tax exoneration on the sale of secondary homes applicable after 15 years have been watered down by the Finance Ministry after pressure from MPs from President Sarkozy’s UMP party.
There will still be an eventual exoneration, but not until 30 years’ ownership.
The move comes in the middle of bargaining over the government’s planned austerity measures with UMP MPs fearing that the CGT change would impact the property market and lead to an increase in fraud.
Les Echos said a 2% per year tax allowance would apply between five and 15 years of ownership, then 3% up to 25 years and 10% between 25 and 30 years. It would therefore be 50% after 25 years and then full exoneration after 30.
It is not known if the proposals will be enough to appease UMP MPs who are debating the plans in the National Assembly today.
Another change proposed relates to Sociétés Civiles Immobilières (SCI) – companies set up to own property. It will require that if shares in these are sold overseas a French notaire must be involved, so as to ensure tax is paid.
Photo: Juha Blomberg
