Real estate: New rules of the game from July 1

From July 1, the terms of transfer of real estate will undergo a profound change. The 2024 finance law established, at the level of article 139-IV of the CGI, a measure intended to improve the collection and management of local taxes: housing tax, municipal services tax (TSC) and land tax. unbuilt urban areas.

Notaries, adouls, lawyers approved by the Court of Cassation and any other person exercising notarial functions will no longer be able to draw up any act unless they present a certificate from the collection services justifying that the taxes relating to the immovable property under the year of transfer and in years not prescribed have been paid. Failing this, these persons will be fiscally joint with the assignees for the payment of tax debts. Another new feature is the obligation to mention the article number of the housing tax and the municipal services tax on the acts drawn up since this is the objective of the reform.

From the publication of the finance law, and even during the period of its examination by the two Houses of Parliament, the new provisions raised some questions from professionals, particularly with regard to real estate developers. The circular from the General Directorate of Taxes finally provided the necessary clarifications. These concern constructions carried out by real estate developers, which are part of their stock and which are intended for sale as part of their professional activity.

Thus, once the residence permit is issued or the individual land titles constituted, the developers will have to ask the services concerned, for identification purposes, the article number of the housing and municipal services tax for each unit. . The tax will only be issued once the good is sold to customers. A provision which will now make it possible to register thousands of real estate properties for local taxes.

Indeed, until now, these new homes were sold without ever being registered for local taxes and it is only at the time of their resale that the transferor is ordered to pay the arrears for four years . Hence the low yield of the housing and municipal services tax if we take into account the size of the existing real estate stock. Which does not contribute significantly to the financing of local authorities. Among the causes of this poor performance, the non-existence of a physical census of the real estate stock and the spontaneous non-identification of owners with the services concerned.

If the provisions of the finance law apply to new real estate transactions, the current stock remains excluded since identification for housing and municipal services tax is only obligatory at the time of resale.

The circular from the tax administration put an end to the apprehensions of professionals who had a somewhat narrow interpretation of the wording of the provision. Thus, the obligation to produce a tax clearance will not apply to other types of acts concerning sales. Sales agreements, sales or purchase promises, reservation contracts or even preliminary sales contracts are therefore excluded.

The relevance of the new provisions should result in an increase in local tax revenues, the poor relation of Treasury revenues.

ICE gets involved in transactions

Another new provision, and in the event of transfer of real estate or business, persons exercising notarial functions will also be required to mention the common company identifier (ICE) on the deed recording the transfer or sale. or the item number of the housing or municipal services tax. Otherwise, the document will be rejected upon registration by the tax services. On this point, it should also be noted that the 2024 finance law made a modification. We will therefore no longer have to talk about tax inspectors responsible for registering real estate since this formality is carried out electronically. But the consequence will remain the same due to the fact that the refusal of registration of transactions not respecting the new provisions will be carried out via the tax administration portal.

The end of an era

The new provisions applicable to real estate put an end to an old practice which gave notaries responsibility for the payment of taxes and local charges on real estate under penalty of fiscal solidarity with the transferors. The principle, which had no legal basis, consisted of notaries retaining, after registration with the Land Registry, approximately 20% of the funds coming from transfers as a preventive measure while waiting for the tax certificate to be obtained. . The objective is to prevent any late payment of taxes. The retention of part of the proceeds of the sale by notaries was not always to the taste of sellers who wish to quickly dispose of their funds to be able to pay for a new property or pay an advance. In practice, the system showed its limits since thousands of real estate properties continued to escape the net of the tax authorities and were only caught up at the time of resale. At this point, sellers were only required to pay for the four non-prescribed years.

Hassan EL ARIF



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