In the case of real estate gains, the tax is paid at the final act (official sale). It is the notary who is responsible for drawing up the declaration to be lodged with mortgage preservation and paying the tax on behalf of the seller.
The capital gain is calculated on the difference between the sale price and the purchase price of the property.
The sale price : It corresponds to the amount appearing in the act of sale. It is deductible, with justifications, the costs incurred on this occasion. (For example: commission paid to an intermediary or agent, diagnostic and certification expenses, eviction allowances, architect’s fees for studies prior to a building permit or costs for mortgage release.)
The purchase price : It corresponds to the amount appearing on the purchase deed or, for a property acquired free of charge, at the market value stated in the deed of donation or the declaration of succession. To this amount is added the acquisition costs, fixed at a fixed rate of about 7.5% of the acquisition price, and the amount of the works, it means, the construction, reconstruction, expansion, renovation, or improvement with justifications (works invoices). Without justifications a flat rate of 15% of the purchase price can be applicated.
There are two rates, a flat rate of 19% and for social security contributions at the current rate of 17.2% (CSG)
The reduction in real estate capital gains is progressive. The holding period will therefore determine the percentage of the reduction applied to the capital gains recorded:
- No reduction for the first five years of detention
- Reduction of 6% and 1.65% of CSG between the 6th and the 21st year of detention
- 4% and 1.60% reduction in CSG from the 22nd year of ownership
- Exemption beyond the 22nd and 9% of CSG year of detention.
- Total exemption beyond the 30th year of detention.
For a total exemption, on the capital gain, a detention of thirty years is necessary, or it need to be your primary residence.