Sale of French second home causes capital gains tax worry

Readers have told us of their worry over a very high capital gains tax (CGT) bill for the sale of a second home.

They said this is because they lack bank statements from 15 years ago proving payments for the purchase of land, their new-build house and their swimming pool.

They said this is despite the fact they will have an overall capital loss.

Bank statements should not be necessary to calculate CGT

The basic taxable capital gain is the difference between the original purchase price recorded in the deeds by the notaire and the sale price, and bank statements should not be necessary for these.

If anything else, - including a house being built on land you bought - is to be considered to reduce the taxable gain, fiscal representatives might ask to see statements. However, some are reportedly more flexible than others on evidence.

One possible ‘solution’ might be providing a large guarantee sum to be held back for three years in case of tax office queries.

See the two articles below on the mandatory hiring of a représentant fiscal to deal with capital gains tax on second home sales.

Couple find solution to French second home tax retention on house sale

Extra step in French property sales for UK, US, Australian residents

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