Before a non-resident sells real estate in France, there is a key step that is often overlooked: appointing a tax representative. Without one, the transaction may be blocked or delayed. This legal obligation is designed to ensure the correct declaration and payment of capital gains tax.
When is tax representation mandatory?
The law provides for several situations in which a non-resident must appoint a tax representative when selling a property located in France:
- when the sale price exceeds €150,000;
- when the property has been owned for less than 30 years;
- when the transferring company is based outside theEuropean Union or theEuropean Economic Area (excluding Liechtenstein).
These conditions apply to both individuals and companies. They are designed to ensure that the
Why is a tax representative required by law?
The French tax authorities seek to ensure that the tax owed by a non-resident vendor will be collected. The tax representative plays the role of guarantor:
- he draws up the capital gains declaration,
- it checks the calculation and applicable allowances,
- he is accountable to the authorities for proper execution.
This obligation may seem onerous, but it is designed to secure the transaction for both the State and the seller.
Concrete examples of situations
- Sale of an apartment in Paris for €250,000 by an American resident: appointment of a tax representative is mandatory.
- Sale of a chalet in Morzine for €1,000,000, held for 35 years: no obligation, as the length of ownership eliminates all taxation.
- Sale of commercial premises in Lyon for €140,000 by a Swiss company owned for 12 years: tax representative required, since the company is outside the EU/EEA.
This last case illustrates the specificities of cross-border sellers. For a broader overview, including Swiss rules, please see our article on domiciliation and fiscal representation between France and Switzerland.
What are the risks if I forget? Ignoring the obligation of fiscal representation can have serious consequences: the sale will be blocked or delayed by the notary. In other words, fiscal representation is more than just a formality: it is essential to the success of the transaction.
How do you choose your tax representative?
Choosing a tax representative is more than just signing a document. It’s best to rely on an experienced firm, capable of :
- coordinate exchanges with the notary,
- anticipate sensitive tax points,
- provide a rigorous follow-up of the file until its completion.
With this in mind, our tax representation services for non-residents offer a secure framework and efficient management of all the steps involved.
Support from Bergeot Paoli Associés
Our team regularly works with non-residents to secure their real estate sales in France. We offer comprehensive support:
- analysis of tax conditions,
- preparation of the capital gains declaration,
- exchanges with notaries and the administration,
- tax compliance guarantee.
By choosing an experienced tax representative, you can avoid common mistakes, secure your transaction and reduce processing times.