Added value and second home: A complete guide

La Selling your second home can generate a added value. It is essential to fully understand this concept to optimize your taxation and avoid unpleasant surprises.

Unlike the main residence, the gain realized on the sale of a second home is subject to several taxes. It includes Income tax, the social security contributions, and sometimes a additional tax If the Real estate capital gain is greater than €50,000.

In this article we are going to explain how Calculate the capital gain, which Abatements for length of detention are factored, and how to reduce your taxes through exemption mechanisms.

‍

‍

What is the added value of a second home?

When selling a second home, the amount of real estate capital gain Realized corresponds to the difference between selling price And the purchase price good. To calculate this value, several elements are factored in order to determine the raw value before tax rebates.

‍

Definition and calculation of capital gain

La real estate capital gain is obtained by subtracting the acquisition price ofthe selling price. The acquisition price corresponds to the amount entered in the act of purchase, to which you can add some construction expenses.

The selling price is the amount received by the owner of your home, after deduction of expenses related to the transaction (diagnostics, agency fees, etc.).

‍

What elements are taken into account in the calculation?

• Acquisition price : amount paid upon purchase, including notary fees and registration fees.
• Construction expenses : some improvement or expansion works may be factored in calculating capital gain, provided that they are justified by invoices.
• Length of detention : one Detention allowance applies after the 6th year, reducing the tax payable.

‍

The taxation of real estate capital gains on a second home

La Selling your second home is subject to several levels of taxation.

‍

Income tax and capital gain taxation

La raw value carried out during the sale is subject to Income tax at the fixed rate of 19%. In addition, there are social security contributions of 17.2%.

If the Real estate capital gain is greater than €50,000, a additional tax applies. This tax is progressive and increases with the amount of capital gain.

‍

Allowance for length of detention: how to reduce taxation?

The tax on the real estate capital gain can be reduced thanks to a Detention allowance. The longer the property is kept, the less burdensome the taxation is.

• After 6 years : a gradual reduction begins.
• After 22 years : full exemption from Income tax.
• After 30 years : total exemption from social security contributions.

‍

When are you exempt from capital gains tax?

• Sale after 22 years : capital gain exempt from Income tax.
• Sale after 30 years : capital gain completely exempt from social security contributions.
• Reinvesting in a primary residence : if the owner of your home reinvests the proceeds of the sale in the purchase of his main residence within a period of 24 months, it can be exempt.
• Sale to a public or social organization : under certain conditions, the sale may be tax exempt.

‍

How to optimize the added value on the sale of your second home?

Selling a second home with a maximum of added value requires good foresight. It is not enough to put your property on the market to get a good price. Several strategies make it possible to optimize the value of the property and to limit taxation. Home improvements, a good sales price estimate, and effective tax planning can make all the difference.

‍

Valuing your property before selling

To get a real estate capital gain interesting, it is essential to make your property attractive in the eyes of buyers. A well-maintained and well-maintained home can sell more quickly and at a higher price. Several actions can be implemented to optimize the appearance and functionality of the property.

Perform renovation work : Make renovation work allows you to increase the Value of a residence. This may include energy renovations (insulation, double-glazed windows), upgrades (electricity, plumbing) or even aesthetic improvements (painting, modernizing the kitchen or bathroom). These works can be factored In the Calculation of capital gain and make it possible to attract more buyers who are willing to pay a higher price.

Highlighting the property : The Home staging is an effective technique to increase the attractiveness of the property. It consists of unclutter spaces, use neutral and harmonious colors, and highlight the advantages of the home. Beautiful professional photos and a careful announcement can also play a decisive role in the attractiveness of the property.

• Perform renovation work : a modernization of housing often makes it possible to increase the selling price.
• Highlighting the property : home staging, beautiful photos and good maintenance increase the chances of a quick and profitable sale.

‍

How do you calculate the capital gain before selling?

• Accurately estimate the selling price : analysis of the local market and valuation by an expert.
• Deduct acquisition and work expenses : optimize the calculation to reduce taxation.
• Anticipate additional taxes : in case of real estate capital gain greater than €50,000, assess the fiscal impact.

‍

Practical cases: selling to buy a new main residence

• Exemption possible : if the proceeds of the sale are reinvested in a main residence, an exemption is possible.
• Organize your real estate project well : sell at the right time to maximize profits and reduce the tax burden.

‍

Do you want to sell to buy a property? Call on one of our real estate hunters to help you find the ideal property. Discover our service here.

‍

❓ FAQ

1. How is the added value of a second home calculated?

La real estate capital gain corresponds to the difference between selling price And the acquisition price, after deduction of construction expenses And Abatements for length of detention.

‍

2. What is the impact of the length of ownership on the taxation of capital gains?

After 22 years, the added value is exempt from income tax at the rate of 19%. After 30 years, it is completely exempt from social security contributions.

‍

3. Is there an additional tax on high capital gains?

Yes, if the Real estate capital gain is greater than €50,000, a additional tax applies according to a progressive scale.

‍