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Real estate gains: the new rules

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Good news, the taxation on capital gains on the resale of a second home or rental has been lightened. But beware, part of the measure is time-limited.

In case of a capital gain (difference between the purchase price and the sale price) when selling a home, it is taxed by the tax authorities for 34.5%, social security contributions of 15%. , 5% included. Since 2011, it took 30 years to be completely exempt, instead of 15 years previously.

On September 1, 2013, this duration was again changed, it is reduced to 22 years. This measure is, for the moment, intended to continue.

Another decision was made for a period of one year to encourage a particularly hesitant second home market. The seller receives for one year an exceptional allowance of 25%, in addition to the allowance for duration of detention.

Capital gains exempt from tax after 22 years of detention

From now on, for the calculation of the tax, from the 6th year of detention and until the 21st, a property sees its capital gain diminished by 6% per year (instead of 2% currently). In the 22nd year, the allowance is 4% to reach 100% exemption. Beyond this, the 19% taxation due on the income tax disappears.

Social deductions disappear after 30 years

On the other hand, social security contributions of 15.5% resist for 30 years: from the 6th year of ownership, the discount is 1.65% per year, then 1.60% in the 22nd year, and 9% from the 23rd year. It takes 30 years to no longer have to pay social taxes.

An exceptional deduction

Sales made during the year, from September 1, 2013 to August 31, 2014, benefit, once the deductions for holding period have been deducted, from an additional 25% reduction on the amount of the taxable gain. The latter applies to both the income tax and social security levies, which causes a sharp decline for the seller.

Read also: Loans and benefits: the latest devices.

The surcharge is maintained

The recently decided surtax persists: owners realizing capital gains above 50,000 euros will be subject to a surcharge. Between 50 001 and 100 000 euros, the surcharge amounts to 2%, between 100 001 and 150 000 euros at 3%, between 150 001 and 200 000 euros at 4% and between 200 001 and 250 000 euros at 5%. Beyond 250 001 euros, it will pay 6%.

Building land not affected by the reform

The current calculation method continues to apply to building land. Land must always be owned for at least 30 years to be exempt from capital gains tax. It is even a question of tightening the taxation from next year: the grounds would be completely excluded from the reductions for duration of detention. The goal is to encourage homeowners to sell their land as soon as possible instead of holding them for many years to benefit from the abatement, as is the case today.

The test of numbers

Either housing acquired in 2000 at a price of 178,000 euros and resold 530,000 euros. The tax, including surtax, will be 54,985 euros for a sale occurring before 31 August 2014, and 68,672 euros if it occurs after 1 September 2014.

Capital gains are taxed only on second homes and rental properties, the main residence remains exempt.