France relaxes capital gains tax rules
France relaxes capital gains tax rules
France is temporarily relaxing its capital gains tax (CGT) rules. The move comes as more owners of property in France find it harder to sell their homes.
No CGT is payable in France on the sale of a property used as the owner's principle residence, according to Internet French Property. However, complications can arise when an owner vacates the property prior to selling it.
Should owners move out of their
gites in France before they are sold, the French tax authorities normally exempt the properties from CGT for up to one year after they are vacated. The French government has now extended this period to two years for those properties sold in 2009 and 2010 that fall into this category.
The
CGT exemption applies provided that the property was occupied by the owner up until it was placed on the market. Therefore, if an owner vacates the property before deciding to sell it, they risk losing this concession. The exemption will not be valid should the property have been
rented out during the year or was occupied by other members of the family while it was on the market.
Concessions are also made in relation to the
divorce or separation of home owners. In this case, where either of the owners is not occupying the property when it is sold, both parties will continue to benefit from a CGT exemption. It is thought that owners involved such situations will also benefit from the
CGT relaxation - the French tax authorities previously limited the exemption to one year following the divorce or separation, but it is likely this period will also be extended to two years.
Anyone
selling property in France is advised to discuss their particular circumstances with the tax authority. This will help to avoid any difficulties later in the process.
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