Unlike the commitment to build (French Tax Code art. 1594-0 G, A), article 1115 of the French Tax Code provides no extension mechanism as of right for the property dealer. Where an extension is requested, it falls within the discretionary assessment of the tax authorities. In practice, only two mechanisms make it possible to go beyond the statutory period of 5 years (or 2 years for unit-by-unit resales): force majeure, whose cumulative conditions are strictly assessed by the courts, and the specific case of properties located in a concerted development zone (ZAC), for which an annual extension is expressly provided.
The legislature deliberately created an asymmetry between the two commitments under article 1115 and article 1594-0 G, A: only the commitment to build benefits from an extension mechanism expressly provided for by the legislation (annual, renewable, upon reasoned request to the DDFIP). The commitment to resell has no equivalent: article 1115 of the French Tax Code mentions no extension procedure.
In practice, where the property dealer is unable to resell within the allotted period, the options are narrow: invoking force majeure before the courts (the conditions are cumulative and strictly assessed), or benefiting from the renewable annual extension specific to properties located in a concerted development zone (ZAC), provided for by article 266 bis of Annex III to the French Tax Code. Outside these two avenues, there is no statutory basis on which the tax authorities may grant additional time.
This asymmetry requires operational control of the timetable from the moment of acquisition. The firm secures transactions upstream (structuring, timetable, documentation of contingencies) to avoid having to rely on these narrow avenues downstream.
None offers an absolute guarantee. But their proper combination makes it possible to defend effectively a transaction that could not be completed within the initial period.
Three cumulative conditions: externality (a cause external to the property dealer and its organisation); unforeseeability (at the time the commitment was given); irresistibility (an absolute impossibility of reselling despite all due diligence). An ordinary commercial difficulty, such as a sluggish market or the absence of a buyer, is never sufficient. The courts rarely recognise force majeure in this area.
For properties located in a concerted development zone and acquired by the person responsible for developing or equipping the zone, a renewable annual extension may be granted by the DDFIP. Accepted grounds include marketing delays caused by administrative or technical difficulties, as well as the time needed to secure land ownership across the entire zone.
Where a single transaction involves both a commitment to resell (art. 1115) and a commitment to build (art. 1594-0 G, A), the express extension obtained for the commitment to build may indirectly justify keeping the transaction within the favourable regime. The BOFiP doctrine accepts a degree of interchangeability between the two commitments (BOI-ENR-DMTOI-10-50), subject to the strict condition of VAT-taxable-person status and the economic consistency of the transaction.
When a client is approaching the deadline, the firm acts in two stages. First, strategy: analysis of the factual situation, identification of the avenue most likely to succeed (force majeure, ZAC, switching to a commitment to build), and assembly of the evidentiary file (correspondence, certificates, timeline of the steps taken). Then, representation: drafting the reasoned request, filing it with the tax authorities, monitoring the exchanges and, where necessary, litigation.
The firm's cumulative experience in these matters makes it possible to anticipate the lines of attack of the tax authorities and to build arguments that withstand judicial scrutiny.
No, not on the same terms. Article 1594-0 G, A of the French Tax Code expressly provides for a renewable annual extension of the commitment to build (upon reasoned request to the DDFIP, by registered letter with acknowledgement of receipt, within one month of the expiry of the period). Article 1115 of the French Tax Code, which governs the commitment to resell, provides no equivalent mechanism. In practice, the only statutory avenues are force majeure (assessed by the courts) and the ZAC extension (article 266 bis of Annex III to the French Tax Code).
Three cumulative conditions: (1) externality, the cause of the impossibility of reselling must be external to the property dealer and its organisation; (2) unforeseeability, the cause could not have been anticipated when the commitment was given; (3) irresistibility, it was impossible to resell despite all reasonable diligence. The courts require all three and dismiss ordinary market difficulties (absence of a buyer, insufficient offer price).
Article 266 bis of Annex III to the French Tax Code provides for a renewable annual extension of the resale period for properties located in a concerted development zone and acquired by the entity responsible for developing or equipping the zone. The extension is granted by the departmental or regional director of public finances (DDFIP/DRFIP). Accepted grounds include marketing delays linked to administrative or technical difficulties, as well as the time needed to secure land ownership across the entire zone (pre-emptions, expropriations, retrocessions).
Forfeiture triggers the recovery of the duties not previously collected, payable within one month of the breach of the commitment, plus late-payment interest under article 1727 of the French Tax Code (0.20% per month, i.e. 2.40% per year), in accordance with I of article 1840 G ter of the French Tax Code. If the tax authorities further consider that the transaction constitutes an abuse of law (Tax Procedure Code art. L.64 or L.64 A), a 40% or 80% surcharge is added under b of article 1729 of the French Tax Code.
Act early. Three lines of action: (1) document from now on the steps taken (active sale mandates, marketing efforts, correspondence with potential buyers), which is useful for invoking force majeure before the courts; (2) analyse the alternative avenues (partial sale, switching to a commitment to build if the transaction involves works, restructuring of the transaction); (3) provision for the cost of a possible forfeiture (duties plus interest at 2.40% per year since the acquisition). An early audit considerably reduces the risk of a heavy sanction.
Topics frequently linked to the extension of the commitment to resell.
Overview: reselling, building, extensions, takeover of commitments.
Voir la page Commitment to resellGeneral framework: conditions, sanctions, abuse of law (L.64, L.64 A).
Voir la page Commitment to buildThe mechanism expressly provided for by art. 1594-0 G A: points of comparison.
Voir la page LitigationResponse to a proposed reassessment, hierarchical appeal, litigation.
Voir la pageA confidential initial discussion to analyse the possible avenues for extension and assemble the evidentiary file before the period expires.
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