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Sale of the main residence: beware of the questioning of the capital gain exemption – EconomyMorning


The capital gain realized on the sale of the main residence is exempt, provided that the accommodation actually has this quality of main residence on the day of the sale. However, it may happen that on the day of signing the final deed of sale, the seller has already left his home.

In this case, the tax administration, like the case law, admit that the exemption is not called into question if three conditions are met: the building was occupied by the seller until it was put up for sale; the sale takes place in a normal delay ; the accommodation is not, between its sale and its actual sale, rented out or occupied free of charge by members of the owner’s family or third parties.

The whole problem lies in this notion of “normal time” which is not defined and which can vary according to the circumstances. If the sale occurs within a period of one year, this is not considered excessive. Beyond this, case law analyzes all the circumstances of the transaction, in particular the local conditions of the real estate market, the asking price, the specific characteristics of the property sold and the due diligence carried out by the taxpayer for the sale of this property. .

In a case submitted to the Administrative Court of Appeal of Marseille, a couple of taxpayers signed a sales agreement on May 26, 2010 relating to a property constituting their main residence until the end of July 2010. The effects of compromises were extended by successive amendments with a future purchaser who was authorized to occupy the house, by paying rent, from July 30, 2010 until the completion of the sale. However, this did not take place. The prospective buyer gave up the purchase on May 5, 2011, but did not leave the premises until September 24, 2011. The sellers put their property back for sale in May 2011 by concluding sales mandates with Real estate agencies. The property was finally sold on September 2, 2013.

Considering that more than three years had elapsed between the date on which the sellers left their home and the actual sale of it, the tax authorities refused to allow the capital gain to be exempt from the sale of a main residence. The sellers seized the Administrative Court of Toulon which rejected their request. The Administrative Court of Marseille, in a judgment n ° 19MA04636 of February 16, 2021, confirmed this judgment.

The Court argues that the selling prices of the money orders were sometimes increased during the period, settling between 1,800,000 euros and 2,000,000 euros; the extent of the work undertaken to add value to the property, and to justify this increase in the asking price, has not been established; this period of work cannot be subtracted, for the assessment of the diligence performed by the seller, from the period during which the house has remained unoccupied, since there is no evidence of their interest to allow the rapid sale of the property; if the property sold for the sum of 1,532,600 euros was aimed at a wealthy clientele, it has not been established that due to the economic context and despite the efforts of real estate agencies, the sale could only be carried out after a period of ‘about two years after the departure of the premises by the purchaser who had signed the sales agreement of May 26, 2010.

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