Are you planning to sell your second home and would like to understand how to calculate and optimize the capital gain from this sale? This article will answer all your questions and give you tips on how to maximize your profit.
Calculating capital gains
The capital gain on a second home is calculated by deducting the purchase price (plus certain expenses, if any) from the sale price (minus certain expenses, if any). This capital gain is taxed at 19% for income tax and 17.2% for social security contributions.
Possible allowances and exemptions
Deductions from income tax and social security contributions are granted according to the length of time the property is held. A total exemption from income tax is possible after 23 years of ownership, and a total exemption from social security contributions after 30 years. Other situations also qualify for exemption from capital gains tax, such as the sale of a property for less than €15,000 for a single person (or €30,000 for a couple), or when the seller is disabled, retired with a taxable income below a certain threshold, the sale concerns an expropriation, or the seller resides outside France.
Tips for maximizing your added value
To optimize the capital gain on your second home, you can increase the purchase price by adding certain expenses incurred for the acquisition and improvement of the property. In addition, an exemption is possible if you have not owned your principal residence in the four years preceding the sale, and you invest the proceeds of the sale in the purchase of your principal residence in the four years following the transaction.
Calculating and optimizing the capital gain on a second home may seem complex, but with the advice of a real estate professional, you can sell your property while maximizing your profit and complying with tax regulations.
