Tax on lands to be constructed

The Tax Law for the tax year 2006 has given to the french « communes » the right to institute a tax on building lands sales.

Every seller, individuals or legal entities, french resident or non-resident, who is not liable to tax on profits, has to pay this tax.

This tax applies to the first costly sale (inheritance and gifts are not taken into account) done after the land has become a building land, and if the selling price is higher than 3 time of the purchase price

Until september 2009, 28th, this tax is equal to 10% of 2/3 selling price
After this date, this tax will be equal to 10% of the capital gain, i.e. the difference between the selling price and the purchase price updated with the latest price index.

This tax has to be paid with the capital gains tax on the same tax return (5th page), by the notary when he gives the deed to the french administration.

The tax representative is also responsible for this tax.