Real estate sale: How to use the work to reduce the capital gain tax?

To reduce taxation on the added value for the sale of a second home, the cost of the work can be added to the purchase price. On one condition, detailed by Nathalie Couzigou-Suhas, notary in Paris, in the “Large Rendez-vous of real estate” (Capital/Radio Immo).

Capital video: Real estate sale: Can I deduct the amount of the work I carried out from the added value?

• 
  

  To safeguard
  
  
  

  Saved
  

Owner of a secondary residence In Brest, Josiane made a great deal by reselling it with a capital gain of 22,000 euros. Only downside, this difference between the sale price and the purchase price of the property will be taxable, up to 36.20 %. A rate that includes income tax (19 %) and social security contributions (17.20 %). “With the exception of the main residence, when you sell a property that you have had for less than 30 years, you are taxed on the Plus-sale of transfer»»Recalls Nathalie Couzigou-Suhas, notary in Paris, in the program “Le Grand Rendez-vous de l’Emalmboards” (Capital/Radio Immo).

But Josiane has an idea to try to reduce the amount of her added value and, therefore, of the tax on it. “Can I add the cost of works carried out in my second home at the price at which I bought it? ”she asks. The idea is good, recognizes Nathalie Couzigou-Suhas, “It is a question of inflating the purchase price with the cost of the work to reduce the gap with the sale price”. Except that Josiane and her family carried out the work in their second home, Without using building companies.

Work carried out by the owner or by a company?

Gold, “On the basis of paragraph 4 of Chapter II of article 150 VB of the General Tax Code, only the presentation of business bills allows you to add the cost of the work to the purchase price of the property ”underlines the notary. And to add that if Josiane had entrusted the realization of the work to a company but had bought constructio materials herselfn, it could only have added the cost of labor at the purchase price of its second home, and not the purchase price of materials.

As a consolation, Josiane can add to the purchase price of her country house “A 15%package, if it has been holding it for over five years”indicates Nathalie Couzigou-Suhas. Concretely, if Josiane bought her second home at a price of 200,000 euros eight years ago, she can add 15% of 200,000 euros to this sum, or 30,000 euros. It’s better than nothing but “often much lower than the cost of a heavy renovation which would have been carried out by a company ”and which would therefore have inflated the purchase price of 80,000 euros for example, nuance Maître Couzigou-Suhas.

Our experts – real estate agents, notaries, lawyers – answer you

Are you an owner, buyer, seller still investor and do you also have a legal, tax or practical question? Do not hesitate to connect to the Facebook group Le Proprios club To ask your questions. The 14,000 members of this group, created and managed by capital, will be happy to deliver their feedback. In a second step, we will also try to bring back your questions to submit them to our experts who will answer them in the next issues of the “Great Rendezencies”.