When is the capital gains tax due?
The sale of a property allows the seller to realize the capital gain. This is always valid whether you sell a house, an apartment or a piece of land. Thus, it is the profit you make after a real estate sale. It is subject to a tax, so a question arises, when should you pay this capital gains tax?
The taxation of the real estate capital gain
Except in case of exemption, the payment of a capital gains tax is mandatory. All sellers domiciled in France are subject to capital gains tax. Therefore, even if the property is located abroad, but the seller is a French resident, he/she is still subject to capital gains tax. Then, sellers residing in the metropolitan departments are also concerned.
Capital gains made by individuals are also taxable. These include a spouse, your own person or a dependent. Capital gains made by certain legal entities are also taxable. This is the case for non-trading real estate companies or SCI. They are subject to income tax.
Conditions for a capital gain
Some conditions must be met for there to be a capital gain. First of all, the sale or exchange must be a transfer for consideration. A free transfer such as a donation or an inheritance is thus exempted.
Then, for there to be a capital gain, the sale must be of real estate or real estate rights. Obviously, the exemption automatically cancels the taxable capital gain. Then, the capital gain cannot be zero or negative. In this case, it will be a capital loss.
Payment of the tax on the capital gain
First of all, you should know that the declaration and the payment are made at the same time and in the same place. You have to make them at the time of the sale and the payment is made at the notary’s office. The notary makes a specific declaration and you, as the seller, receive the price net of tax.
The cost that you will have to pay is the notary’s fee for the declaration and the payment that he has made on your behalf. The amount of remuneration is indicated in a table providing for the cost of the formalities for the actions carried out by the notary. This amount is 69,23 euros including VAT. This fee is entirely at the seller’s expense.
On the other hand, the seller is required to report the net amount of the capital gain on his tax return. Be aware that the omission of such a declaration is punishable by a fine. The fine is the equivalent of 5% of the amount you did not declare. Therefore, in general, the amount of this fine is between 150 and 1,500 euros.