France Capital Gain Tax Changes Confirmed July 201314 June
At present, this taxation is made up of 19% tax and 15.5% social charges, which reduces gradually each year up to thirty years when the property sale is exempt from capital gains tax. From 1st September, the exemption will kick in after twenty years for the taxation element, although it will still be necessary to wait for thirty years regarding social charges. In addition, the capital gains tax will be reduced by 25% for transfers realised between next September 1st and August 31st 2014.
With this fiscal support, the government wants to boost an apathetic real estate market as well as distance itself from the Fillon government which changed the taxation exemption from 15 to 30 years in February 2012. “We need action in this crisis - a fluid market which encourages work and helps the building sector to recover,” declared Bernard Cazeneuve. The executive also wants to incentivise the sale of plots of land by eliminating the allowances for duration of detention. However, at the same time it is allowing departments to increase transfer taxes payable by households when purchasing accommodation from 3.8% to 4.5%. This is not a fair or coherent policy. In fact, someone purchasing their main home will pay more tax than someone who is selling a second home.
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