Capital gains tax

[exile]

Sorry to drag this one up again but yesterday we signed the initial agreement, and this CGT question reared it's ugly head. I can only do my research on the internet, and from what I can gather, it seems that the notary, unfortunately, seems to have made a bit of an error.
As I said earlier originally purchased in 2005, old barn in grounds converted in to extra accommodation under planning consent granted in 2008 and finished in 2010, so looking at the table of abatement, given on all the explanation of French CGT, you get zero allowance for the first 5 years, and then it is on a sliding scale of 6% every year after, so if I bought the property in 2005 and am selling it in 2026, making that 21years in total, so the abatement / allowance would start coming in to effect in 2010, and according to my calculations after the initial 5 year zero period we should be looking at a corresponding 21 years of allowance @ 6% a year, which I believe carries up to 20 years and then drops to 4% for year 21. This would then give me an allowance to set against the CGT of at least 90%, and not as the notaire has calculated at only 15 years and 60%, he seems to be using the year that the construction, renovation was finished in 2010 as a starting point and not from when the initial purchase was made. Am I missing something here or am I right?

When you say you bought in 2005, this means that the abatement starts after 5 years. So 2010 is the start point for the 6% pa abatement. I make that 15 years as oes your notaire.

As others have said, that you have to consider that one of the properties on the same bit of land is a maison secondaire is very strange. It will no doubt apply to us but since there are no plans to leave here except in wooden boxes, it will not be our problem. Or maybe since both properties share the same underfloor heating, it might be argued that the two are connected.

[RobertArthur]

@ Blaze, unfortunately, it is not unusual for politicians to try to win over voters in presidential elections by offering them gifts that will ultimately have to be paid for by the taxpayer. This was the case with the ‘waiver’ of the taxe d'habitation for primary residences. For second homes, this tax remains in place.

It is also not unusual in administrative circles to hand out gifts with a nice brass band and respectfully listening journalists without considering the consequences for the implementation of certain measures in practice. Add to that mix some serious ICT problems in the context of an administrative tradition where the higher policy bodies are always right and the implementers have to figure it out for themselves, and you end up with a situation in which, if I had been a simple tax official with queues of law-abiding citizens at my door, I would not have been happy.

[hughnique]

I think we might be overthinking this a bit, but, as you intimate, the main residence was purchased as a habitable house and it was several years before we considered a renovation to an old barn on the same plot. The other thing that has thrown me a bit is that, although I can see the logic, he has used the 2005 date of purchase to ascertain the value of the barn at that time, and that is 15K€, then the main residence and said improved and habitable barn square meterage have been combined and divided into the selling price, as of today, and that figure has been multiplied by the floor area of just the barn, as it now stands to arrive at a figure of 65K€, he then takes the estimated value in 2005 from that and arrives at a gross profit of 50K€. on which figure he is basing the demand for CGT. but he then uses the 2010 completion of the renovation to start his calculations. Coupled with the fact that the renovated building is reliant on both electricity and water from the main residence, but his use of the square meterage calculations for the value of said barn fall in the same bracket as the main residence, without which there would be no utilities connected to the barn. I fail to see that this is proper, using one date when we purchased the whole lot and then another starting date 5 years later to calculate what is owed.

[hughnique]

When you say you bought in 2005, this means that the abatement starts after 5 years. So 2010 is the start point for the 6% pa abatement. I make that 15 years as oes your notaire.

But that is the argument, I make it 15 years in effect but 15 x 6% per annum comes to 90%, he is only allowing 60% as he has imposed a second 5 year non qualifying period from 2010 thereby giving me a start date of 2015 and 10 years of abatement 60%

[hughnique]

It has been suggested that I shimmy off down to the Impots and explain the situation to them, but I can just imagine what that out come might end up like. I can foresee that dreaded question well have you been paying Tax habitation and the answer is a big NO, so then it will be a case of working out what that is going to cost me when they backdate that to 2010. Sometimes its best to cough up and shut up, it is only amounting to 3.5K€ so according to the wife a piddling amount in the big scheme of things, certainly brings tears to my eyes.