Le 2 novembre 2020

Crédit d’impôt en cas d’abandon de loyers, qu’en attendre ?

Bruno Le Maire a annoncé jeudi dernier la création d’un crédit d’impôt bénéficiant aux bailleurs qui renonceraient à une quote part de leurs loyers sur les derniers mois de l’année. L’idée, louable, bien que mettant un peu de pression supplémentaire sur les bailleurs, semble être de partager le coût d’une telle aide consentie au locataire entre le bailleur et l’Etat. En pratique et en attendant le projet de texte (devant être intégré dans la loi de finances pour 2021), que peut-on en dire ?

Read more ...




Real estate taxation, investment assets: rentals

> Introduction

> Profits tax
> Local taxation
> Tax audit




Tax aspects of acquisitions/disposals of real estate asset

> Real estate asset
Real estate investment company



Taxation of real estate asset, as a part of stock

> Introduction
Development operations

> Acquisition and resale
Profits tax




Tax aspects of the legal methods oh holding investments

Unregulated structures 

Regulated structures 



Taxation of the real estate assets of private individuals

> Introduction
> Rental income
Capital gains on real estate
Furnished rentals
Real property wealth tax
Gifts / Inheritances



Internatial investments: French tax aspects

> Institutional investors / Companies
> Private individuals


Tax audit



VAT is not always applicable to real estate asset disposals, but in virtually all cases, their disposal will have an impact in terms of VAT. 

3 main cases may be distinguished:

  • VAT on the sale (applicable automatically or optionally): → VAT on the price net of tax or on the margin (upstream VAT not settled)

  • No VAT on the sale: → upstream VAT settled by the vendor

  • Application of Article 257 bis of the FTC (operation classified as a transfer of activity for VAT purposes): → no VAT on the sale and upstream VAT not settled by the vendor (settlement undertaking assumed by the purchaser).  

VAT applicable automatically 

VAT must be paid on transfers of ownership of real estate assets taking place prior to or after construction or major restructuring work. 

 These VAT scenarios are envisaged within the framework of real estate development operations (see hyperlink: Development operations / VAT).  

Option to apply VAT


Where a sale is made by a party liable to pay VAT, the tax is optionally applicable to all real estate asset disposals not automatically subject to VAT (Article 260.5° of the FTC) unless the operation falls within the scope of application of Article 257 bis of the FTC (universal or partial transfer of assets). 

Where the vendor opts for VAT to be applied to the sale of a real estate asset, the base for assessment of VAT depends on whether or not, at the time the real estate asset had been purchased by the vendor, such acquisition entitled the latter to a VAT deduction. 

VAT must be paid on operations involving real estate assets prior to or after construction or major restructuring work.


Problem of establishing historical details in the case of old real estate assets (what were the tax arrangements at the time the real estate asset was purchased?) 

 Benefit of opting for VAT    

As with payment of VAT on rents (see hyperlink Rentals /VAT), the question arises as to what benefits may be derived by choosing to apply VAT to a transaction at the rate of 20% where this is not obligatory. 

For the purchaser, the option offers no particular advantage.

On the contrary, in some cases it represents a significant drawback:

  • Either the purchaser can deduct the VAT that it is required to pay on the purchase as it will be using the real estate asset for operations that are subject to VAT; the fact that VAT is applied to the transaction merely involves a cash disbursement between the date of the sale and the date on which VAT will actually be deducted and/or repaid;

  • Or the purchaser cannot deduct this VAT, as the real estate asset is not assigned to an activity subject to VAT in the wake of the acquisition; VAT on the sale then increases the price by 20%. 

For the vendor, thanks to the principle whereby VAT relating to expenditure can only be deducted if this expenditure contributes to realising a turnover that is itself subject to VAT (Article 271 of the FTC), applying VAT to the sale may entitle it to deduct any VAT previously paid in connection with the real estate asset. 

Nevertheless, depending on the case, other mechanisms may be used to achieve the same objective. 

VAT settlements


Where a real estate asset ceases to be used for an activity liable to VAT, its owner must make settlements on the basis of the 1/20th rule (Article 207 of Appendix II of the FTC). 

This regime is based on the principle that, where a fixed asset is purchased, the VAT due on the price paid is deductible if such fixed asset is assigned to an activity subject to VAT for a certain period of time. In the case of real estate assets, this period is 20 years or parts of a calendar year. 

ð If the fixed asset is not assigned throughout this period to an activity subject to VAT, a VAT settlement must be made; this takes the form of a repayment to the Treasury of a proportion of the VAT payable on the purchase price of the fixed asset (see situation concerning real estate asset works). 

This settlement applies both to the purchase price of the real estate asset and to any works executed on the real estate asset since the time of its acquisition, in which case the time allowed for settlement starts on the completion date of each of the works executed.  



  • Real estate asset purchased on 1/09/2001 for: €5 M net of tax plus €980,000 VAT 
  • Works executed in 2008, to the value of: €300,000 net of tax plus €58,800 VAT 
  • Real estate asset resold in 2014 for: €10 M net of tax 

If opting to pay VAT: 

→No settlement for the vendor 

→VAT settled by the purchaser: €2 M net of tax may be deducted if asset used for an operation subject to VAT 

If not opting to pay VAT 


€980,000 x (20-14)/20    = €294,000 

€58,800 x (20-7)/20       = €38,200 

→€332,200 repayable to the Treasury 

With a certificate issued to the transferee enabling it to deduct VAT (if the asset is capitalised)

In the case of a disposal of a real estate asset which is / has been booked as a fixed asset, this operation nearly always falls within the scope of VAT settlements (at least in respect of works executed over the past 18 years), unless the disposal itself is subject to VAT or in the scope of Article 257 bis of the FTC. In point of fact, since the sale of the real estate asset is subject to VAT, it confirms the deduction of the upstream VAT paid on the purchase price of the real estate asset plus any works executed. When Article 257 bis of the FTC applies, VAT settlements undertaking are assumed by the purchaser.

Transfer of deduction rights

If the purchaser of the real estate asset:

  • posts the real estate asset as a fixed asset, and
  • uses it for an activity subject to VAT
    • ð It can deduct the amount of VAT settled by the vendor, provided that the latter gives it a certificate stating the amount of VAT settled (note that this certificate must be issued).
    • ð In this case, and provided that the purchaser pays the amount of VAT settled to the vendor, over and above the price of the real estate asset.

This VAT will not constitute a cost for the parties:

  • for the purchaser, the amount that it is paying over and above the price corresponds to an amount that will be repaid to it by the Treasury within the framework of the deducting of the amount of VAT stated on the certificate issued by the vendor;
  • for the vendor, the amount of VAT settled and repaid to the Treasury is offset by the additional amount paid to it by the purchaser. 

The purchaser’s repayment to the vendor made in connection with this VAT settlement will still however be regarded as an addition to the price (or a charge added to the price, see hyperlink: Real estate asset / TPF), which is in turn subject to TPF. 

This transfer mechanism for VAT settlements will only work if the purchaser posts the real estate asset as a fixed asset. However, if the real estate asset is held in stock (e.g. where it is purchased by a property dealer), this transfer may be able to proceed after a one-year period has elapsed pursuant to Article 207 IV. 3. of Appendix II to the FTC. 

Article 257 bis of FTC


This article stipulates that, where a company’s assets and liabilities are transferred in whole or in part, the operation should have no consequences in terms of VAT. 

The tax authorities take the view that a real estate asset that is rented out and whose rents are subject to VAT and which constitutes a fixed asset that is comparable to a company for VAT purposes. 

ð If such a real estate asset is sold to a purchaser who also holds it as a fixed asset and continues to rent it under a lease agreement subject to VAT, the operation constitutes a partial transfer of company assets and liabilities and benefits from the arrangements provided for under Article 257 bis of the FTC

The disposal then has no consequences in terms of VAT, i.e.:

  • no settlement,
  • nor even any actual payment of VAT if the sale of the real estate asset is automatically subject to VAT (no VAT option is however possible).

ðThe purchaser and the vendor have simply to indicate the selling price of the real estate asset on their CA3 VAT declaration (on the ‘Other non-taxable operations’ line). 

ðThe purchaser will also have to ensure it obtains a document from the vendor stating the amount of VAT to be settled and the date on which the expenditure to which this VAT relates was made. 

In point of fact, as the purchaser is carrying on the vendor’s activity, it will assume the latter’s settlement obligations.


Ultimately, where a real estate asset is sold that does not automatically require VAT to be applied.

3 situations may arise, depending on whether: 

  • the vendor opts to apply VAT to the sale; or
  • the sale automatically comes within the scope of Article 257 bis of the FTC; or
  • the sale gives rise to settlements on the part of the vendor.




  • Real estate asset purchased in 2001 for: €5 M net of tax plus €980 K VAT  
  • Building works executed in 2008 for: €300 K net of tax plus €58.8 K
  • VAT  Real estate asset resold in 2014 for: €10 M net of tax


haut parleur1


Contributing a real estate asset to a company as an asset is different from a sale in that no money changes hands. The consideration granted for transferring ownership of the real estate asset to the company is the hand-over of securities (stocks and shares) representing rights in the company (voting rights and dividend rights). 

An exception to this principle is the so-called "purchased" contribution (as opposed to an "outright" contribution), whereby the contributor is not remunerated in the form of securities but by the company making payment or taking over one of the contributor’s personal debts (e.g. the loan attached to the real estate asset contributed). 

→A purchased contribution is treated as a sale for tax purposes. 

→An outright contribution is subject to: 

VAT according to the rules applicable to sales;

TPF as follows:

    • - exemption unless the contribution is made : 
    • - by a person who is not liable to pay corporation tax, 
    • - in favour of a company that is liable to pay corporation tax. 

In which case sales duty applies (at a global rate of 5%).