What work can I deduct from my added value?
What is a real estate capital gain?
The real estate capital gain corresponds to the remaining difference between the final sale price and the purchase price of the real estate transaction (difference between the sale price and the purchase price).
In accordance with the provisions of Article 150 VA of the General Tax Code (CGI), the transfer price to be retained is the actual price as stipulated in the deed.
Real estate capital gains taxable on income apply to:
Calculate a real estate capital gain:
In accordance with the provisions of Article 150 VA of the General Tax Code (CGI), the transfer price to be retained is the actual price as stipulated in the deed.
Real estate capital gains taxable on income apply to:
- The sale of real estate (house, apartment or land),
- The sale of a right or title attached to real estate (bare ownership, usufruct, shares in SCI, etc.)
- The exchange of goods, sharing or contribution in society
Calculate a real estate capital gain:
- Gross capital gain = Sale price - Purchase price
- Sale price (sale) = Sale price + Expenses borne by the purchaser - Disposal costs
- Purchase price = Purchase price + Expenses incurred at the time of purchase + Acquisition costs + Works expenses Road, network and distribution costs
- Net capital gain = Gross capital gain - Allowance (It is actually necessary to calculate two net capital gains: the one that will be taxed as income tax (19% tax) and the net capital gain subject to social security contributions (17.2% tax) )
What about real estate capital gains for non-French residents?
It is good to know that the capital gain will be subject to a levy at the rate of 19%, regardless of the country of residence. The real estate capital gain will also be subject to social security contributions up to 17.2%.
Since the taxation of property income received in 2018 and real estate capital gains realized since 1 January 2019, persons affiliated to a compulsory social security scheme, other than French, within an EEA country (European Union, Iceland, Norway, Liechtenstein) or Switzerland, are exempt from generalized social contribution (CSG) and contribution to the repayment of the social debt (CRDS).
> British residents continue to benefit from these exemptions despite leaving the European Union
Several people can be tax representatives:
Since the taxation of property income received in 2018 and real estate capital gains realized since 1 January 2019, persons affiliated to a compulsory social security scheme, other than French, within an EEA country (European Union, Iceland, Norway, Liechtenstein) or Switzerland, are exempt from generalized social contribution (CSG) and contribution to the repayment of the social debt (CRDS).
> British residents continue to benefit from these exemptions despite leaving the European Union
Several people can be tax representatives:
- The buyer of the property if he is fiscally domiciled in France,
- Banks and credit institutions operating in France,
- Any person accredited by the administration.
How to reduce the amount of a real estate capital gain?
The tax system allows certain expenses to be deducted:
With the deductible expenses, the purchase price of the property is increased by at least 22.5%.
- Acquisition costs: notary fees, registration fees, etc.
- Work as long as it is carried out by a company: expansion and improvement work is deductible from real estate capital gains, as are construction or reconstruction work.
With the deductible expenses, the purchase price of the property is increased by at least 22.5%.
What works can be deducted from the real estate capital gain?
It is possible to deduct from the capital gain:
The following are excluded:
- Construction, reconstruction, development or improvement work;
- Road, network and distribution costs,
- The fees of an architect.
The following are excluded:
- Expenses related to the maintenance of the dwelling (repair, renovation, maintenance)
- Expenses already taken into account to determine income tax (expenses deductible from property income for example)
Ce qu’il faut retenir :
- The real estate capital gain corresponds to the remaining difference between the final sale price and the purchase price of the real estate transaction (difference between the sale price and the purchase price).
- It is good to know that the capital gain will be subject to a levy at the rate of 19%, regardless of the country of residence. The real estate capital gain will also be subject to social security contributions up to 17.2%.
- The tax system allows certain expenses to be deducted, including work as long as it is carried out by a business.
- This concerns expansion, improvement, construction or reconstruction work.
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Posted on 30/08/2023 by
Andy LECUYER
