Repatriating the proceeds of a French sale: the tax withheld, the tax representative and when to convert
A non-resident seller who has signed expects to receive the price; they will receive the net, and the gap can be large. The notaire calculates and pays the capital gains tax on their behalf, withholds what must be withheld, and only releases the funds after their checks. This dossier says what is withheld, why, and when to organise the currency exchange and the transfer home.
By Jean Mascla, founder of Home SelectUpdated · 6 min read
Who calculates the tax, and when?
The notaire, at the time of the sale, and they pay it on your behalf. It is a French peculiarity that often surprises: the taxation of a non-resident’s property gain is not the subject of a later return you would fill in at leisure, it is assessed and withheld at source, from the price, before anything reaches you.
The calculation takes account of the purchase price, the allowable costs and works, and the length of ownership, which opens increasing reliefs. Two sales at the same price can therefore leave very different nets depending on the acquisition date and the quality of the evidence kept.
Why the paperwork is worth money
Because it reduces the taxable base, and it has to exist in an admissible form.
Invoices for works, in particular, cannot be found after the event. A job paid for ten years earlier, with no invoice kept, is treated as though it never happened. That is one reason among others to keep a clean file throughout the period of ownership rather than reconstructing it at the moment of selling.
The reflex meets the one for buying: the file that documents the source of funds on the way in is the same one that, years later, will establish the cost base on the way out.
The tax representative: who, when, why
Where the seller lives outside the European Union and the European Economic Area, the law may require the appointment of an accredited tax representative, who answers for the tax before the authorities. Exemptions exist, notably based on the sale price and the length of ownership.
Two things to know. The first is that the appointment takes time and is paid for, often as a percentage of the price: it therefore enters the calculation of the net. The second is that it is triggered early, and a seller who discovers the obligation a fortnight before the deed postpones their signing.
So put the question to the notaire as soon as the property goes on the market, telling them your country of tax residence. Their answer runs to one sentence and it changes your timetable.
The notaire’s statement, line by line
On the day of the deed, the notaire draws up a statement that starts from the price and ends at the net. Deducted from it, depending on the case: the capital still owed on a loan secured on the property, with the costs of releasing the mortgage; the capital gains tax and social charges; the tax representative’s fee where one is required; the sums owed to the co-owners’ association.
Ask for the draft statement before the signing, and have your adviser read it: it is the only document that says what will actually reach your account, and it is on it, not on the price, that the exchange and the repatriation calendar are set.
Les Issambres, Côte d’Azur
When should you organise the repatriation?
Once the net is known, never before. That is the point of method that avoids costly mistakes.
A seller who hedged their currency in advance on the amount of the price ends up having sold more euros than they will receive, and has to buy the difference back at the prevailing rate. Hedging, where it is justified, covers a prudent estimate of the net, not the headline price.
Remember also that the notaire only releases funds after their checks, which can take a few days to a few weeks. The date of the outgoing transfer is not the date of the deed, and a currency order dated on the deed finds itself out of step.
The most exposed moment of the operation
The one where you send your bank details to the office. A large sum, a known date, a seller abroad communicating by email: that is exactly the configuration diversion attempts target, described in the notarial transfer fraud, except that here the flow runs the other way.
The reflex is the same, and it is the only one that works: send the details through a safe channel, and have them confirmed by voice, on a number you dialled yourself. Two minutes, on an operation that cannot be undone.
What Home Select organises for repatriating your proceeds
Home Select is first a property finder, on the buyer’s side: we know what serious buyers look at and what makes a sale fail at the preliminary contract. When you sell or pass on a property, your property finder frames the calendar and the documents with you, remotely.
We introduce the notaire used to sellers and heirs who live abroad, the surveyor for the diagnostics, the tax adviser and the tax representative where your country requires one. The deeds, the diagnostics and the tax are theirs, under their responsibility: our role is that everything arrives in order, without you having to fly in.
Frequently asked questions
Can the notaire transfer straight to a foreign account?
Yes, in the vast majority of cases, provided the account is in the seller’s name and the details are passed through a safe channel. It is precisely the operation that diversion attempts target: the details are confirmed by telephone, on a number you dialled yourself.
Is a tax representative always required?
No. The obligation targets sellers resident outside the European Union and the European Economic Area, and it has exemptions based on the sale price and the length of ownership. It is for the notaire to decide in the light of your situation, and the question arises as soon as the property goes on the market, not at signing.
Must the sum be declared in your country of residence?
Almost always, even where the tax has already been paid in France: the double tax treaty between the two countries then organises relief, it does not remove the duty to declare. Have the point confirmed by an adviser in your country before the sale, because it can bear on the date you choose.
When should you organise the repatriation?
Once the net is known, never before. That is the point of method that avoids costly mistakes. A seller who hedged their currency in advance on the amount of the price ends up having sold more euros than they will receive, and has to buy the difference back at the prevailing rate. Hedging, where it is justified, covers a prudent estimate of the net, not the headline price.
Who calculates the capital gains tax of a non-resident seller?
The notaire, at the time of the sale, and they pay it on your behalf. It is a French peculiarity that often surprises: the taxation of a non-resident’s property gain is not the subject of a later return you would fill in at leisure, it is assessed and withheld at source, from the price, before anything reaches you.
Why do works receipts matter on resale?
Because it reduces the taxable base, and it has to exist in an admissible form. Invoices for works, in particular, cannot be found after the event. A job paid for ten years earlier, with no invoice kept, is treated as though it never happened. That is one reason among others to keep a clean file throughout the period of ownership rather than reconstructing it at the moment of selling.
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