The new measures apply to sales of real estate excluding building land for which the calculation in force continues to apply. Currently, you must have owned land for at least 30 years to be fully exempt from capital gains tax. This will still be the case for sales until December 31, 2013.
According to the government, this should encourage landowners to put them up for sale rather than keeping them to reduce the amount of tax as is currently the case.
As of September 1, 2013, for other assets subject to capital gains tax, the exemption will be total after 22 years of ownership compared to 30 years currently. But beware, this exemption concerns the share of income tax due on the capital gain, but does not concern social security contributions! It should be remembered that the total amount of capital gains tax, which currently stands at 34.5%, is made up of both:
- 19% tax on income tax;
- 15.5% social levies (CSG, CRDS and social levy).
In conclusion, after 22 years, sales will escape the 19% income tax, but will remain subject to social security contributions. Only sales of goods owned for at least thirty years will fully escape any taxation.
During the first 5 years of detention, nothing changes, there is still no reduction by duration of detention, as is currently the case.
But as of September 1, 2013, for property other than building land, the rate of the allowance will be tripled from the 6th year of ownership as follows: it goes from 2% to 6% from the 6th year , and remains constant for 16 years, which allows a total reduction of 96% after 21 years of ownership of the property.
Then, with a 4% reduction for the 22nd year of detention, this therefore allows 100% reduction after 22 years of detention.
On the amount of taxable capital gain generated, an exceptional allowance will apply to sales of homes that will take place between September 1, 2013 and August 31, 2014. It is calculated after taking into account the allowance by duration of holding, and applies to both income tax and social security contributions. Once the taxable capital gain has been determined according to the new calculation, a 25% allowance will therefore apply.
This new tax system is therefore clearly more favorable for those who sell a home.
Example :
For a single resident or a married couple under a community regime.
Acquisition on February 1, 2003 for €190,000.
Resale on September 3, 2013 for €420,000.
The sale occurring after 10 full years of ownership, the calculation is made as follows:
- Acquisition price of €190,000 to which are added 14,250 euros of “notary fees” (7.5% of the purchase price by default) and 28,500 euros for work (15% of the purchase price by default), i.e. €232,750
- The taxable capital gain is therefore €420,000 – €232,750 = €187,250
The situation until September 1, 2013:
| Amount of capital gains tax | Amount of taxation on social contributions |
| The reduction per holding period is 2% from the 6th to the 13th year, i.e. 10% (5 x 2%) | The reduction per holding period is 2% from the 6th to the 13th year, i.e. 10% (5 x 2%) |
| Or 187,250 – 10% = €168,525 Reduction amount €18,725 | Or 187,250 – 10% = €168,525 Reduction amount €18,725 |
| Tax due: €168,525 x 19% = €32,020 | Tax due: €168,525 x 15.5% = €26,121 |
| That is a total of €58,141 | |
To which we add the amount of the additional tax for real estate capital gains of more than 50,000 euros in the amount of 6,741 €, i.e. a total tax of 64,882 €.
The transitional situation from September 1, 2013 to August 31, 2014:
| Amount of capital gains tax | Amount of taxation on social contributions |
| The allowance per holding period is 30% i.e. 187,250 – 30% = €131,075
Amount of reduction €56,175 |
The allowance per holding period is 8.25% i.e. 187,250 – 8.25% = €171,802
Amount of reduction €15,448 |
| Exceptional reduction of 25%: €131,075 – 25% = €98,306
Amount of reduction €32,769 |
Exceptional reduction of 25%: €171,802 – 25% = €128,851
Amount of reduction €42,950 |
| Tax due: €98,306 x 19% = €18,678 | Tax due: €128,851 x 15.5% = €19,972 |
| That is a total of €38,650 | |
To which we add the amount of the additional tax for real estate capital gains of more than 50,000 euros in the amount of 1,966 €, i.e. a total tax of an amount of 40,616 €.
The situation as of September 1, 2014:
| Amount of capital gains tax | Amount of taxation on social contributions |
| The allowance per holding period is 36% i.e. 187,250 – 36% = €119,840
Amount of reduction €67,410 |
The allowance per holding period is 9.9% i.e. 187,250 – 9.9% = €168,712
Amount of reduction €18,538 |
| Tax due: €119,840 x 19% = €22,770 | Tax due: €168,712 x 15.5% = €26,150 |
| That’s a total of €52,515 | |
To which we add the amount of the additional tax for real estate capital gains of more than 50,000 euros in the amount of €3,595, i.e. a total tax of an amount of €52,515.
file to download:
130924 new capital gains measures (example)
