VAT on property
Property Value Added Tax on property (VAT on property) is a tax levied by the French State, when the sale concerns a new property whether it is housing or building land.
VAT on property and acquisition of housing
We must distinguish between new buildings old buildings:
1. Old housings
Sales of buildings completed for more than 5 years are exempt from VAT
2. New housings
Sales of buildings completed within the last 5 years are subject to VAT at 20%)
VAT on property and acquisition of building land
To determine the tax system, we must distinguish two cases:
1. Transfers between individuals
Only registration fees are due (5.09%, 5.80% worn in most departments), no VAT.
2. The land sold by a professional
Land sales by a VAT registered business are subject to VAT at 20%, the buyer is an individual or not. VAT is normally paid by the seller.
If he had bought the land to a non-taxable person for VAT, the VAT will apply to margin and the buyer must pay 5.09% of registration fees currently charged at 5.80% in most departments.
If the trader had purchased the land from a taxable person for VAT, the VAT will apply to the whole sale price. In return, the buyer will benefit from registration fees reduced to 0.715%.