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FrançaisHi all,
Perhaps a stupid question, does any one know how to captial gain is calcualted for French leaseback properties?
To be specific, is it just as simple as sales price - purchase price, or is it sales preace - (purchase price - depreciation). Of course i know there are fees to add to sales price and purchase prices, but my point is more on the depreication which over 10 -20 years is very significant, which will increase the captial gain (and hence tax) quite a bit.
The reason why I ask is I am comparing Austria leaseback to the French version. Among the many differences, I am not sure about this one. I know for sure deprecciation is accouted for in captial gain calculation in Austria, and I am not a fan. From what I read from the internet, the French does not look at depreciation, is it true?
Thanks
Tom Liu
To calculate the amount of net capital gains, in France Gross Capital Gains can be adjusted by the following factors:
Deductible expenses: Home improvement expenses (extension, double glazing, new kitchen etc) are deductible from the sale price as long as the vendor has kept invoices and proofs of payments and has not already deducted these expenses for other purposes. Alternatively,if the vendor has owned the property for more than 5 years the vendor may use a flat rate deduction equal to 15% of the purchase price. These may include the costs incurred to complete the mandatory certificates and surveys (eg Energy Performance Certificate) as well as the fees the fiscal representative may charge.
Purchase fees: Fees including stamp duties, notary and agent fees which were incurred when buying the property can be added to the purchase price. By default a flat rate of 7.5% of the purchase price can be used.
Taper relief :This is effectively an allowance for the duration of ownership (check the reduction allowed based on the number of years owned)