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Information from our notary partner – Property Transfer Taxes

property-purchase

Information from our partner notary

Purchase and ownership of a property in France by non-french tax residents

 

Property Transfer taxes

  • 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 considered, 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).

 

For any questions, our partner notary shall be ready to give you more precise information.

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