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The capital gains tax reform (see our posts “Capital gains tax reform on French property: latest updates (part 1)” and “Capital gains tax on French property: simulation shows significant tax reduction (part 2)”) already in force since the 1st of September but not yet validated by the National Assembly and the Senate is now in the draft of the 2014 Finance law  (article 18). It confirms the sharp reduction in capital gains tax and the additional 25% rebate from the 1st of September 2013 to the 31st of August 2014 (read our post “Capital gains tax on French property: latest updates (part 1)”). It also implements de cancellation of any tax rebate for building plot land from the 1st of January 2014 onward (as we already mentioned in our post “time to buy building land in France?”…). IF the National Assembly, the Senate and the Conseil Constitutionnel do not change anything, it will be a rare event for a “positive” tax reform to be implemented retroactively.

The rational of the tax reform is to reactivate the property market which has experienced a sharp decrease in the number of transactions since 2011. However, the capital gains tax reform is rather complicated and the impact might not be as wide as the government is expecting it to be.

You can access to the draft of the 2014 Finance law (“projet de loi de finances pour 2014),article 18 is on page 77 and 78: