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Posted on January 13, 2010


Definition : (article 35 of the French revenue Code).

A property dealer (“marchand de biens”) is a person who buys in its own name, in order to sale buildings, businesses/commercial establishments (“fonds de commerce”), shares of a real estate comp any, or who usually subscribes those shares, in order to sale.

A person who, usually, buy real property (“bien immeuble”) in order to build properties and sale them. They are submitted to the payment of the Income tax (“impôt sur le revenu ”) within the category of profit from industrial and commercial occupations (“bénéfices industriels et commerciaux).

In order to be considered as a property dealer, you will have to fulfill two criteria:

  • The operation made must have an usual character; and

  • The speculative intending (“intention speculative”) at the time of the acquisition.

The profit or losses (“pertes”) are calculated from the difference between the sale’s price of the buildings and the coast prices (“prix de revient”) increased by the expenses (“frais et charges”). The profits are submitted to the income tax unless they are made by a civil company (“société civile”) in which case they are submitted to the corporate tax (“impôt sur les sociétés”).

The calculation base of the VAT (value added tax) is made from the margin (“marge’) and not the entire amount of the sale price.

The gross margin (“marge brute”) is the difference between:

  • The expressed price (“prix exprimé”) and added expenses; and

  • Either, the sum paid by the assignor (“cédant”) for the property;

  • Or either, the nominal value (“valeur nominale”) of the shares given in exchange of transfers in kind (“apports en nature”) made.

The VAT rate is 19,6%.

According to the article 257

  • 7 of the French income Code, the operations contributing to the construction of buildings (the purchase of a building land (“terrain à bâtir”), the sale of new buildings, or of real estate company’s securities (“titre de sociétés immobilières”)) are submitted to the property VAT

fichier à telecharger:
100113 – Property Dealer & Property VAT

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