Plus-value is the gain produces by the sale of a piece of real-estate, when compared to its purchasing price. Since January 1st 2004, plus-values realised by the costly cession of building by private owners in the context of the management of their personal property are taxed by proportionality on the global revenue. The plus-value is declared and the tax paid during the mutation. Taxation is calculated by a proportionality of 16%, plus social taxed of 11%. Therefore, taxation of plus values is of 27%.

 How is the plus value tax calculated?
One should first calculate the full plus-value brute, by subtracting the original purchasing price from the current selling price. However, one should add to the initial purchasing price the following expenses: lawyer’s fees, costly mutation rights, commissions to intermediaries (real-estate agents), building, reconstruction, amelioration, etc., costs. Thus the actual plus-value can be accurately determined.

Other deductions can then be applied:
• reduction of 10% per year of ownership after the sixth year, for buildings and parts of societies primarily concerned with real-estate;
• A fixed deduction of 1,000 Euros applied on the full plus-value, corrected by duration of ownership deductions, as the case may be. 

  Eight known exoneration cases

1- Cession of one’s primary residence, including outbuildings (service room, garage located less than 1km away). Even better, even if the primary residence is not inhabited at the time of the transaction, three cases still grant exoneration: the normal length of the transaction procedure, separation, divorce.

2- land redistribution operations. Plus-values obtained in the case of exchanged due to urban or rural restructuration are exonerated. 

3- Cessions under 15,000 €. This ceiling is assessed on a case by case basis, in the case of the cession of building parts. 

4- A property owned for more than 15 ans. Thanks to the reduction of 10% per year after the sixth year of ownership.

5- For the holders of an elderly pension or invalidity card, provided they do not pay the ISF and their revenue does not exceed a certain fiscal ceiling.

6- For non-residents. Depending on antecedents in fiscal domiciliation and ownership of property, they are allowed the same exonerations as residents.

7- In the case of the cessation of the primary residence to an associate in a SCI. If an associate is inhabiting a property belonging to an SCI as his primary residence, free of charge, he will be exonerated from the plus value proportionally to the shares he holds in the society.

8- In the case of an expropriation. Plus-value made from the sale of all or part of a building or rights pertaining to said building if there has been a declaration of public interest in view of an expropriation. The seller must use all of the expropriation benefit for the acquisition, building, reconstruction or amelioration or one or several pieces of real estate within a year of the receiving of the sum. 

 The possibility of less-values
No imputation can be made on less-values in the cessation of buildings, nor of plus-values of the same nature for that matter, nor on global revenue. There can however be a compensation between plus-values and less-values in the case of the selling of a building that has been acquired in successive fractions. 
 

By Me Gabriel Neu-Janicki