Although for most people Capital Gains Tax (plus-value) can be an irrelevance, or fairly simple, in some cases it can be a complex issue.
The tax that you pay is split into two parts:
The first thing to bear in mind is that if the French property you are selling is your 'tax residence' (i.e. the place from where you pay your income tax) you will not pay Capital Gains Tax or Prélèvements Sociaux when you sell it (although you may pay it on a gite or other 'separate dwelling' that makes up part of your property.) If you are paying your taxes in the UK and not paying tax in France, you may be liable to pay Capital Gains Tax and Prélèvements Sociaux on your French property when you sell it (if you have made a capital gain.)
If you have any doubt or questions regarding your Capital Gains Tax, book an appointment with your notaire to discuss it.
There are several exemptions and allowances based on a variety of factors. These range from:
It is possible to deduct some costs associated with improving a property when calculating Capital Gains Tax. However 'general maintenance' on a property is not deductible so it can be difficult to pin down exactly what is and isn't eligible. Often this distinction is down to each individual notaire to define. This will also be checked by the French tax authority. There are, however, some general rules:
- DIY work is not eligible for deductions
- Only work carried out by a (usually) French registered building professional is eligible for deductions
- You will need to provide invoices for this work and often bank statements showing payments
- If you have been granted tax relief on an 'improvement' in the past (e.g. on installing energy conservation to your home) you are unlikely to receive tax relief again at this stage