Reform of the most real estate values: three solutions to reduce the invoice

The finance bill presented by the government on August 24 modified the taxation of real estate capital gains.After parliamentary discussion, the deputies kept the principle of the reduction, which the government had suppressed, but passed the exemption period from 15 to 30 years, with a new scale (see opposite).

If you have a family home where you no longer spend your vacation, or a rental heritage that you want to give in in a few years, make your calculations."Many owners do not realize the amount they will have to pay the taxman because they have no idea of the added value," sighs Jean Perrin, president of UNPI.Yet in ten years, the stone market has progressed a lot, some regions displaying increases of more than 100 %!With a taxation of 19 %, plus 13.5 % of social security contributions, the check to pay to the taxman will often represent several tens of thousands of euros.

To escape this new tax or in any case limit it, there are several strategies (read below).The first of them consists in quickly selling your property to benefit from the old exemption regime.Please note, the effective sale must have been made before February 1, 2012, that is to say that the compromise or the promise to sell must be signed in the month of November at the latest.To escape the new tax, it is better to plan everything, and in particular to anticipate a possible gap due to the buyer."The seller can provide with his notary the insertion of a clause which indicates that the buyer will support the tax on capital gains if he was responsible for a delay in the signature", advises Philippe Pescayre,Lawyer-associate in the Alérion cabinet.

This will be the case if, for example, he did not meet deadlines to request his bank credit.Another possibility, if you anticipate some financing problems for your buyer, insert a resolutory clause in the deed of sale which sets up a payment for six months."This makes it possible to sign the final act before February 1, 2012 and therefore to benefit from the old capital gains regime," says Alexia Henry, heritage engineer at the BPE.

Another track, only valid for individuals who envisaged the sale of a very large real estate heritage and will not be able to meet the deadlines of February 1: relocating to a country of the European Union before the sale.Provided of course that they have an economic interest in living in their new country."In this case, they will be submitted to the new tax regime, but they will only be imposed on 19 % on their capital gains and will escape the 13.5 % of social security contributions," notes Philippe Pescayre.

Keep or rent

Last track: keep the property.You have had a real estate heritage for over ten years and do not plan to get rid of it.To avoid paying the new tax, keep it!Because if you sell it in two or three years, the bill may be salty."People who have been holding their property for 15 years are today exempt in full capital gains, but will only benefit from a 20 % reduction from February 1, 2012," said Alexia Henry, heritage engineer atThe BPE.If you own a second home, rent.

3 strategies to reduce tax

1 - Do not hesitate to make donations

If you have an important real estate assets, and you plan to transmit it to your children, this is probably the right time.Indeed, as the donations are taxed, they are exempt from capital gains tax.

Giving real estate therefore makes it possible to fully purge the added value achieved, whatever the duration of detention.

Concern ?Sometimes, the amount of donation rights is greater than the capital gains gain, it is therefore necessary to perform tedious calculations before embarking on the operation.

Good to know: it is possible to make a donation with charge, "this means that if the owner donor still reimburses a credit to finance the good he gives, the transfer rights will be calculated on the net value of this property,Once entrenched the amount of credit remaining due, ”specifies Christophe Chaillet, head of heritage engineering in HSBC France.

You have to be sure of your fact, because the donations are irreversible.It is therefore impossible to go back if you finally want to find your property.

However, there is an alternative, it is the dismemberment: "If the accommodation given is intended to provide additional income, it is better to give bare ownership and keep the usufruct to continue to perceive rents", specifies Alexia Henry, heritage engineer at the BPE.

2 - Sell your property to a family SCI

Provided that the operation has a heritage goal, you have the possibility of selling all or part of your real estate assets to an SCI (Civil Real Estate Society).

The taxman is very vigilant on this type of operation, and the risk of requalification is important, if it proves that the sale has the sole purpose of bypassing new taxation on capital gains."Such an operation can be envisaged in the context of a diversification of assets, for an individual who would hold almost exclusively real estate and would like to make liquidity to invest in financial investments," says Alexia Henry, heritage engineer at the BPE.Another idea: to sell a property to a family SCI in which children have shares, "when children are associated with the capital of SCI, this allows you to start a transmission of heritage in the best conditions", underlines Christophe Chaillet, managerFrom heritage engineering to HSBC France.

To optimize the operation, the SCI must finance the purchase of the property on credit because the loan interest is deductible from property income.This type of sale is therefore rather to be favored for rental property assets, because the credit will be partly reimbursed thanks to the rents collected.

Please note: in the event of the contribution of a property by its owner to a family SCI, the new taxation of capital gains has been applicable since August 25, 2011.

3 - Change main residence

Unlike the second home, the sale of a main residence benefits from total tax exemption from the capital gains made.If you share your time between an apartment in a big city and a resort that you plan to sell, it is smart to make this second your main residence before selling it.

The operation is binding because, even if there is no longer a minimum legal period of housing of the property, the tax services are very attentive to this kind of operation."The main residence must be the usual and effective household location," says Alexia Henry, heritage engineer at the BPE.This means that a physical, but also administrative move must be made: income, tax sheets ... must be sent to your new main residence and your identity papers take into account the change of address.The main residence to be the place where the couple works and where the children are educated.Please note, in case of doubt, the taxman will not hesitate to peel the gas, electricity and telephone bills to check the veracity of the move.

INTERVIEW "La communication gouvernementale autour dela nouvelle loi a été outrageusement mensongère"

Jean Perrin, president of UNPI

Does the new taxation on capital gains satisfy you?

Of course not !Even if the State has continued to tax capital gains, over the years, the exemption period had increased from 32 years to 15 years.Fixing this period at 30 years is therefore a real backwards, especially since the losses made by certain owners do not benefit from any particular tax advantage.

What are the goods affected by the new taxation?

From February 1, 2012, all capital gains made on goods that are not main residences will be imposed under the new regime.Government communication around the new law was outrageously false, because it was presented as a simple deletion of the reduction on second homes.It's totally false!Rental real estate and building land are included in the field of the new measure.Only the main residence escapes this new taxation.

This measure is supposed to report 2.2 billion euros.What is your analysis?

This calculation is completely illusory, because the new taxation will encourage the owners to withdraw their property from the sale rather than pay 32.5 % on their capital gains, after minimal abatements per year of detention.This measure will therefore cause a blockage of the real estate market and lower revenue at the overall level, because there will be fewer transfer rights collected, because less sales.In the end, it will therefore also jeopardize the finances of local authorities which will have to increase their local taxes.The owners will therefore undergo a double penalty, because they will see, in the long term, their land taxes increase.

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