Capital gains earned with the sale of property outside the Netherlands
Article ID: 419 | Last Updated: Sat, Nov 28, 2015 at 4:57 PM
We are planning to sell our house in France soon and use the money to buy in the Netherlands, but in no particular hurry given the fact that prices are still falling. We are not sure yet if we have to pay capital gains in France. Can I ask you:
Would we have to pay anything like capital gains in NL
- if we pay capital gains in France;
if we don’t pay capital gains in France?
In your situation the capital gain is not taxed in the Netherlands. First because the property is in France and according to the tax treaty between the Netherlands and France income related to a property is taxed in the country where the property is located. Second because the property is a normal investment and not seen as a business. Whether or not you pay capital gains tax in France is irrelevant.
Presumably we would have to pay vermogen tax (Box 3) if we hang on to the money for a while, but it isn’t clear to me under what conditions. E.g.
- Would we pay vermogen tax only if we still had the money in the bank at the end of the year?
- If so would it be pro-rated over the part of the year we had it?
- Would it make any difference if the money was in an account in France or in NL?
Hoping you can advise.
Once the money is transfered to a bank account it indeed falls under taxation in Box 3. Since you are living in the Netherlands your world wide savings and investments (with a possible exeption for properties) are taxed in the Netherlands. Whether the amount is transfered to a Dutch account or a French account is irrelevant.
The amount on 1 January of each year must be declared. If you receive the capital gains during the year the amount will therefore be taxed in the following year. Taxation is not reduced pro rata if you spend the money during that year again. This is only the case if you leave the Netherlands during the year.