Justice can sometimes be inflexible, it is the bitter observation that Marc D. This entrepreneur was able to do, however, thought he had respected the rules. Installed for several years with his family in a large 250 square meter apartment, located in the 17th arrondissement of Paris, it aspires to more calm. In March 2015, he acquired a house in Garches and plans to move there after work. In December, he moved and put his apartment for sale.
From the start, several agencies assure him that his accommodation, although renovated and located in a popular sector of the capital, could take time to find takers because of its area and its high price. “It was a niche property, sought after by specific buyers”specifies his lawyer, Maître Hervé Oliel. Despite several visits, no serious offer arises. In early 2016, he mandates three agencies and lower his price several times. “Finally, it was my customer who himself finds a buyer in January 2017, with a firm offer of 2.25 million euros, whom he accepts”, indicates his lawyer. The sale was finalized in June 2017, 17 months after its move.
The tax authorities then intervenes and claims to pay the payment of the capital gain tax. “For him, this apartment was always his main residence and had to be exempt from tax”recalls Master Oliel. The law provides that capital gains are subject to income tax and social security contributions, unless the property constitutes the seller’s main residence on the day of the transfer. “A property does not lose this status if the vacuration period is deemed normal”, specifies Maître Oliel. But the taxman estimates that 17 months of vacation are too long to justify the exemption. “There is no strict rule, but the tax administration takes into account an indicative period of 12 months”explains the lawyer. This criterion depends on the procedures taken, the type of property and the local market. “My client had completed all the necessary diligence to sell quickly”he assures.
Marc D. then seized the Administrative Court of Cergy-Pontoise. During the investigation, real estate agencies are requested to find a mandate mentioning a price close to the final transaction. One of them claims not to find this document, however signed by the two parties. “The absence of this document was enough for the administration to doubt the entire sales process”regrets Maître Oliel.
On July 5, 2022, the administrative court therefore rejected the request of Marc D. and validated the taxation of the capital gain. “We called upon, because we had solid elements showing that the sale was well committed in 2016”explains Master Oliel. He notably has email exchanges proving that visits had taken place. However, the administrative court of appeal confirms the decision on July 2, 2024. “They considered that the delay was too long and that the absence of the mandate signed was problematic”deplores the lawyer.
Last appeal: the Council of State. However, he decides not to decide on the case, making the final decision on February 19, 2025. “The Council of State used its right of rejection, there was therefore no longer any legal lever to challenge”indicates Master Oliel. Marc D. must therefore pay a capital gain tax of 80,000 euros. To this amount are added the delay interest calculated over seven years, or 13,440 euros (2.4% per year), as well as a 10% delay penalty of the tax due, or 8,000 euros. “All put end to end, the slate reaches precisely 101,440 euros”concludes Hervé Oliel.