Example of the Capital Gain calculation when selling a property in France
Kees de Jager, Wednesday, 8 November 2023
Basic Plus-Value Calculation:
Deduction for Long-Term Ownership:
If you have owned the property for 10 years, a deduction for long-term ownership may apply, reducing the taxable profit.
Additional Levies on Large Profits:
For profits over €50,000, additional levies are applied, starting at 2% for profits between €50,000 and €100,000.
Tax Calculation:
Deductions and Levies:
The long-term ownership deduction reduces the taxable profit, and the additional levies are applied to the amount over €50,000.
Exemptions and Reductions:
If the property was your main residence, the plus-value may be exempt from tax. Improvement costs to the property can also be deducted from the profit.
Final Calculation with Deductions:
Conclusion:
This is a simple example, and the actual calculation can be more complex, so professional advice is essential.
Basic Plus-Value Calculation:
- Purchase price: €200,000
- Sale price: €300,000
- Plus-value (profit): €300,000 - €200,000 = €100,000
Deduction for Long-Term Ownership:
If you have owned the property for 10 years, a deduction for long-term ownership may apply, reducing the taxable profit.
Additional Levies on Large Profits:
For profits over €50,000, additional levies are applied, starting at 2% for profits between €50,000 and €100,000.
Tax Calculation:
- Fixed tax rate: 19% of €100,000 = €19,000
- Social charges: 17.2% of €100,000 = €17,200
- Total tax without deductions: €19,000 + €17,200 = €36,200
Deductions and Levies:
The long-term ownership deduction reduces the taxable profit, and the additional levies are applied to the amount over €50,000.
Exemptions and Reductions:
If the property was your main residence, the plus-value may be exempt from tax. Improvement costs to the property can also be deducted from the profit.
Final Calculation with Deductions:
- Taxable profit after deductions: €100,000 - (deduction for long-term ownership + improvement costs)
- Fixed tax rate: 19% of the adjusted taxable profit
- Social charges: 17.2% of the adjusted taxable profit
- Additional levies: applicable on the adjusted taxable profit over €50,000
Conclusion:
This is a simple example, and the actual calculation can be more complex, so professional advice is essential.
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