Purchase of the property: in all cases (individual or corporate purchaser), the sale of the property is subject to:
- Transfer duties to be paid by the purchaser at the rate of 5,81% (notably in Alpes Maritimes department) of the price,
OR, rarely to:
- VAT at the rate of 20,00%, included in the sale price and to be paid by the seller, in case the property has been completed for less than 5 years (purchased on plan), or in case of a buildable ground (seller being a VAT subject or a professional), or in the case of properties being sold by professionals that opted to VAT : This regime is in fact quite complex today due to recent regulations, and it now depends on the fact that the seller might or might not himself be a VAT subject. Also, to be taken into account, the way the seller made his own purchase (sale on plan or already fully built)
There might be various other VAT/transfer duty regime in the case the purchaser performs a business activity in France and is already submitted to VAT.
In case the VAT applies, then the transfer duties may be limited to 0,715% (instead of the above mentioned 5,81%).
Purchase of shares of a company owning the property:
- French company: the sale is subject to a rate of 5% to be paid by the purchaser, on a price based on the value of the real estate less the justified liabilities of the company, including the shareholders loan accounts,
- Foreign company (for instance Monaco SCI) : Same as above except that depending on the company’s country’s regulations, other additional tax duties or formality costs may be necessary (such as with Monaco SCIs where there is a 1% tax over the shares price).
[May 2020]