Capital Gains Tax on the sale of a property in 2014

EXEMPTION from CGT in the following cases:
  • Sale of your main residence
  • Sale of a property for less than 15,000 €
  • Sale of a secondary home in order to purchase a main residence (conditional upon occupying your main residence as a tenant for the previous 4 years minimum,  and to re-employ the proceeds within 2 years).
The sale of a property (house, apartment, entire residence) is currently exempt from Capital Gains Tax after 22 years of ownership (the equivalent of 19%) and exempt from the social contributions (the equivalent of 15.5%) after 30 years of ownership.

To calculate the COST OF THE PROPETY, add:
  • Purchase price
  • Purchasing fees on the basis of invoices (Notary fees and agency fees) or in the absence of invoices, a systematic allowance of 7.5% of the purchase price can be made
  • Work carried out on the property by registered tradesmen, on the basis of invoices.  Or a systematic allowance of 15% in the absence of invoices, after 5 years of ownership.
  • Cost of the obligatory diagnostics (energy performance, asbestos, lead, electricity, septic tank inspection etc…)
  • Bank fees for clearing security on the mortgage (if applicable).
SALES PRICE – Price at which the property is being resold.

SALES PRICE minus COST OF THE PROPERTY = GROSS CAPITAL GAIN

First calculation - A rebate is applicable on the taxes and is calculated according to the duration of ownership:
  • 6% p.a from the 5th to the 21st year
  • 4% for the 22nd year
Second calculation - A rebate is applicable for the social contributions and is calculated according to the duration of ownership:
  • 1.65% p.a. from the 5th to the 21st year
  • 1.6% for the 22nd year
  • 9% p.a. from the 23rd to the 30th year
Up until August 31st 2014 a further rebate of 25% can be applied.

To determine the amount of CGT due:
Multiply the result of the first calculation by 19% - for the taxes
Multiply the result of the second calculation by 15.5% - for the social contributions.
Add the two figures together and subtract 25%.

An additional tax is levied in the case of CGT in excess of 50,000 Euros, and as follows:
50,000 – 100,000 Euros: +2%
100,001 – 150,000 Euros: +3%
150,001 – 200,000 Euros: +4%
In excess of 201,000 Euros: +5%

If you wish us to carry-out a CGT simulation for you, please call 02.33.20.49.55

 

Which diagnostics are obligatory for 2014 ?

The number of obligatory diagnostics depends on:
  • The type of property
  • The date when it was built
  • It’s location
In order to market a house or an apartment (for sale or rental) it is obligatory to undertake an
  • Energy Performance Diagnostic (DPE).  Valid for 10 years (except if changes are made to the type of heating or insulation on the property).
In order to draw-up a preliminary sales agreement and for the completion of the sale  it is also obligatory to undertake:
  • An asbestos diagnostic for all properties built before July 1st 1997.  Unlimited validity if no asbestos is detected.
  • Lead (in paintwork) for all properties built before January 1st 1949.  Unlimited validity if no lead is detected.  Valid for 1 year if lead is detected.
  • Electricity and gas (if applicable) for an installation more than 15 years old.  Valid for 3 years.
  • “ERNMT” (Technological and mine risks) for a property located in a risk area.
  • Septic tank inspection.  Valid for 3 years.

Mains drainage inspection.  Unlimited validity.

  • TERMITE inspection if the property is located in a contaminated area.  Valid for 6 months.

DRY ROT - An information pamphlet will be distributed for properties located in a contaminated area, as defined by the local government.  However a diagnostic is not obligatory.