Real Estate transfer tax – Rates applicable in Paris since 1st January 2016

Given the rate increase passed by the Paris council on Nov. 23, 2015 (see our previous article) and the adoption by the French Parliament of an additional tax of 0.6% for offices, business premises and storage premises located in Ile de France (see our article dated Nov. 16, 2015), we felt it necessary to make a first recap of the applicable rates since 1st January 2016 to sales of buildings in Paris, pending comments from the tax authorities.

Property sold by a VAT taxable person acting as such:

– Building completed less than five years: 0.715% (including offices, commercial premises and storage premises)

– Building completed more than five years – offices, commercial premises, storage premises: 6.40% except commitment to sell within five years (1.315%) and commitment to build within four years (to 125 eur to be confirmed) – leaseback agreement with a bank (1.315%)

– Building completed more than five years – other cases: 5.80% except commitment to sell within five years (0.715%) and commitment to build within four years (125 eur) – leaseback agreement with a bank (0.715%)

Property sold by a non VAT taxable person:

– Offices, commercial premises, storage premises: 6.40% except commitment to sell within five years (1.315%) and commitment to build within four years (125 eur to be confirmed)

– Other cases: 5.80% except agreement to sell within five years (0.715%) and commitment to build within four years (125 eur)

We also took advantage of this summary to update the DMTO/RETT space.