In the previous blog, (“French stamp duty due to rise soon…”), we briefly reviewed the 5.09% stamp duty due to increase to 5.89%. However, in a few case you can benefit from “reduced” stamp duty (in French: “frais de notaires réduits”, this wording refers to the “reduced” stamp duty and the “notaire” fees).
1/ You buy an “off plan” property, a flat or a house not yet built or in the process of being built, “achat sur plans” or “vente en état futur d’achèvement” or “V.E.F.A.” in plain French. The seller, generally a property developer, is a “professional” and therefore under the VAT regime. Consequently, the acquisition price includes a VAT at 19.6%*. However, the buyer pays a reduced stamped duty at 0.715% instead of 5.09%. The total acquisition costs stand at 2 to 3% of the acquisition price including the “notaire” fees, instead of 6 to 7%.
2/You buy a building land, the seller is a “professional” (a “lotisseur” or “aménageur”). The professional is under the VAT regime. Therefore the acquisition price includes a VAT at 19.6%*. If the professional originally bought the land from a professional: you only pay the “reduced” stamp duty at 0.715%. However, in case the professional acquired the land from a private owner (not a professional), you pay the full stamp duty at 5.09%.
If you buy the building land directly from a private owner, there is of course no VAT and the standard stamp duty rate at 5.09% applies.
For the moment, it is not clear whether the possible stamp duty rise to 5.79%, may impact or not the “reduced” stamped duty at 0.715%.
* VAT should rise from 19.6% to 20% from the 1/1/2014, with some transition measures.