Capital Gains Tax Increase for 2011
Thursday 30 September 2010
The rate of capital gains tax on house sales will increase by 1% next year, and shares sales will also be subject to tougher taxation.
The proposals are contained in the draft loi de finances 2011, after having been floated by the government earlier this summer.
The change will mean that the rate of capital gains tax on property sales will increase from 16% to 17%, in addition to which social charges of 12.1% are payable. The total rate of tax will, therefore, rise from 28.1% to 29.1%.
There remain various exemptions from liability to the tax, notably the sale of your main home, which continues to be tax free.
In addition, on the sale of other real estate capital gains tax liability reduces by 10% a year after 6 years of ownership, with the sale completely free of tax after 15 years of ownership.
Shares
The draft law also proposes to end the exemption from capital gains tax on the sales of shares.
At the present time, any capital gains realised on the sale of shares is capital gains tax free, provided the value of the sale does not exceed €25,830.
In future, the sale of shares of any amount will incur a tax liability from 2011.
The rate of capital gains tax on shares also increases from 18% to 19%. Together with social charges of 12.1% this means that the total tax rate on share sales will be 31.1%
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This article was featured in our Newsletter dated 30/09/2010
