The amendment says that the sale of second homes will be exempt from CGT when the seller does not own a principal residence.
Trevor Leggett, Chief Executive of Leggett Immobilier, an international estate agency in France, says:
"The amendment is primarily aimed at providing relief to French ex-pats but could benefit hundreds, if not thousands, of UK owners of French houses who had been reluctant to put their properties on the market.
"You must have owned the house for at least five years and you can't have owned a "principal residence" for at least two years. In cases of divorce the absent partner can still consider the marital home the principal residence.
"Parliament has said that the new rule will come into force on 1st February 2012, to co-incide with other property tax reforms, however, I'm not yet sure that they have nailed this down and expect further twists and turns ahead."
Currently, residents of France are subject to fixed rates of capital gains tax of 19 percent as well as paying social charges. Non residents, from outside the EU, pay 33.33% with no social charges.
Those non residents who come from within the EU pay tax on French property gains at 19 percent and do not pay social charges.
The capital gain is calculated as the proceeds from the sale less cost of purchase. A deduction of 7.5 percent of the acquisition price can also be made in lieu of actual costs, or the costs themselves (if you have proof) can be deducted, as well as any costs of sale such as estate agency and legal fees, transfer tax and Notaire's fees.
Parliament has previously said that from 1st February 2012 a new CGT relief will apply:
- Years 1 to 5 - no relief
- Years 6 to 17 - 2 percent relief per annum
- Years 18 to 24 - 4 percent relief per annum
- Years 25 to 30 - 8 percent relief per annum
