LATEST NEWS

 30 April 2019

Regime governing property traders: the Cour de Cassation challenges the possibility to avoid payments of registration fees for operations in the past that partially complied with an undertaking to resell

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FUNDAMENTALS


RENTALS

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gestion

Real estate taxation, investment assets: rentals

> Introduction
>VAT - CRL

> Profits tax
> Local taxation
> Tax audit


ACQUISITION/DISPOSAL

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acquisitions

Tax aspects of acquisitions/disposals of real estate asset

Introduction
> Real estate asset
Real estate investment company
Leasing


DEVELOPMENT

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Taxation of real estate asset, as a part of stock

> Introduction
Development operations

> Acquisition and resale
Profits tax

 


STRUCTURATION

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Tax aspects of the legal methods oh holding investments

Introduction
Unregulated structures 

Regulated structures 


INDIVIDUALS

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Taxation of the real estate assets of private individuals

> Introduction
> Rental income
Capital gains on real estate
Furnished rentals
Real property wealth tax
Gifts / Inheritances
Subdivision


INTERNATIONAL

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Internatial investments: French tax aspects

Introduction
> Institutional investors / Companies
> Private individuals

TAX AUDIT
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Tax audit


Introduction: the 2 main operations in real estate business

Published on .

Introduction: activities relating to the construction or acqusition of buildings 

The activities concerned here are those relating to the construction or purchase of buildings with a view to their sale rather than use, in particular via rental (which does not exclude rentals while the asset is held).

Suchmatters therefore primarily concern:

  • development / operations by property developers;
  • purchase / resale following any works, e.g. via a split sale / operations by property dealers.

In this context, the assets are normally held “in stock” by such operators. 

However, the evolution of the real estate market has created ever closer links between these activities and those of long-term investors.

Indeed, the latter:

  • are increasingly arbitraging their real estate portfolios more actively and, seeking a market opportunity, may be persuaded to sell recently acquired assets;
  • are willing in certain cases to take greater risks to obtain some of the development profit by acquiring bare plots or buildings that will require restructuring in order to carry out works themselves before renting out the property.

The mixture of these two types of activity was noticed by the tax administration, which amended the 2010 regulations, mainly as regards VAT. This led to the abolition of the so-called “property dealer” tax regime (registers, registration, etc.) and all economic operators are now subject to the same regime, with no distinction made according to their main activity. 

This process is still incomplete and subjective notions persist concerning the taxation of profits, including speculative intent, which has a particular impact with regard to the booking of assets. 

Ultimately, the taxation of development operations concerns more than just developers and property dealers: it is intended to apply to all those involved in real estate who are participating in the upgrading of real estate in the form of works (construction or reconstruction) or conducting purchase-resale operations (en bloc or split sales).