those cases where the tax exemption of the capital gain on the sale of the main residence does not apply

The capital gain realized on the occasion of the sale of the main residence escapes all taxation: neither income tax nor social security contributions. In practice, it is sufficient that the deed of sale mentions that the property sold constitutes the principal residence of the seller for the exemption to be acquired.

The notary responsible for drafting the deed does not have to verify the seller’s allegations, and even less to claim supporting documents. “But, in a recent case, the Court of Cassation ruled that he engages his responsibility if he agrees to indicate in the deed that the accommodation sold is the seller’s main residence when he knows that it is not has not been the case for over a year “, warns Nicolo Acquari, patrimonial engineer at Mirabaud.

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To benefit from the exemption, the accommodation must in fact be the seller’s main residence at the time of the sale. This does not exclude the possibility of moving before having concluded the sale. But for the exemption to apply, the move must take place after the sale is made and the accommodation must remain empty until the day the deed is signed. Until that date, the seller must refrain from renting it out, even for short periods, or lending it to a member of his family or a close relative, failing which the exemption will be refused.

The tax authorities admit only one exception: the purchaser with whom the sales agreement has been signed can move into the accommodation by virtue of a temporary occupancy agreement. It is also necessary that the sale takes place within a “reasonable” time. What is generally considered as such when it occurs in the year following the move.

A device for expatriates

But a longer period is not necessarily prohibitive (the judges accepted a period of twenty-seven months in a recent case) if the seller proves that he has done everything to sell his home as soon as possible – multiple announcements of sale, signing of several mandates, lower asking price, etc. -, or that particular circumstances prevented it from selling it more quickly – depressed market, quite atypical, signature of several compromises which did not succeed…

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Since 2019, a specific system also allows those who move abroad to take advantage of this exemption when they resell their main residence after the transfer of their tax domicile abroad, provided that the sale takes place no later than the 31st. December of the year following their departure. “However, this exemption only applies to those who move to another country in the European Union or to a country which has signed an agreement with France on the fight against tax fraud. This is particularly the case of the United Kingdom. Despite Brexit, it is therefore possible to take advantage of this exemption for expatriation across the Channel ”, specifies Philippe Stéphan, notary in Lille, member of the Monassier network.

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