TOPIC PORTAL Property dealer — Tax commitments 07 sujets
Real-estate taxation — Property dealer

Tax commitments of the property dealer:
resell, build, extend

The tax regime of the property dealer rests on two commitments, substitutable for one another under conditions (French Tax Code, art. 1594-0 G, A, II), which condition the exemption from transfer duties: the commitment to resell within 5 years (French Tax Code art. 1115) and the commitment to build within 4 years (French Tax Code art. 1594-0 G A). Their interaction, their extension, their assumption by a sub-purchaser and the abuse-of-law issues that surround them form a technical and litigious field in their own right. This page brings together our detailed analyses by topic.

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— In brief
Commitment to resell
5 years (French Tax Code art. 1115) — exemption from transfer duties
Commitment to build
4 years (French Tax Code art. 1594-0 G A) — exemption subject to construction
Extension
Annual and renewable on request for the commitment to build; no ordinary-law extension for the commitment to resell (only two cases: development zones (ZAC) and force majeure)
Assumption by sub-purchaser
Strict conditions — taxable-person status, continuity of the commitment
— 01

A powerful regime, but a highly technical one

The property dealer regime makes it possible to reduce transfer duties substantially on real-estate acquisitions intended for resale or construction: land registration tax of 0.715% instead of 6.32% in most departments, the increased rate applying to deeds executed and agreements concluded until 31 March 2028, with the commitment to resell, a fixed duty of EUR 125 with the commitment to build. In return, the taxpayer formally undertakes, in the deed of acquisition, to comply with an obligation to resell or to build within a statutory period.

Failure to honour the commitment triggers retroactive forfeiture: the duties from which the acquisition was exempted become payable within the month following the breach of the commitment, together with late-payment interest of 0.20% per month (French Tax Code, art. 1840 G ter, I and art. 1727), running from the first day of the month following the expiry of the statutory period for presenting the deed of acquisition for registration. A surcharge is added only in the event of deliberate breach or abuse of law (French Tax Code, art. 1729). Securing the transaction requires a precise command of the time limits, of the conditions for extension, of the rules on assumption by a sub-purchaser and of the abuse-of-law risks.

The firm regularly handles these matters: pre-acquisition analysis, secure drafting of the deeds, management of extensions, and litigation following a reassessment.

— 02

The topics we cover in detail

This page serves as an entry point. Each topic below links to a full analysis that keeps pace with BOFiP doctrine and the most recent case law.

01

Commitment to resell & abuse of law

When can the tax authorities challenge the commitment to resell on the ground of abuse of law? Criteria, case law, risk mitigation. Read the analysis →

02

Reduced period for the commitment to resell

The two-year reduced period applicable to unit-by-unit sales triggering the tenants' pre-emption right (vente à la découpe): conditions, pitfalls, lessons from practice. Read the analysis →

03

Extension of the commitment to resell

Procedure, admissible grounds, administrative doctrine and room for negotiation with the tax authorities. Read the analysis →

04

Extension of the commitment to build

Differences from the extension of the commitment to resell, timeline, doctrine, litigation. Read the analysis →

05

Assumption of the commitment to build (sub-purchaser)

Strict conditions under which a taxable sub-purchaser may take over the initial commitment without triggering forfeiture. Read the analysis →

06

Hidden (undeclared) property dealer activity

When does a real-estate professional cross into the characterisation of a hidden (undeclared) activity? Tax consequences (80% surcharge under art. 1728 of the French Tax Code, reassessment period extended to ten years, Tax Procedure Code, art. L. 169) and, where applicable, the risk of prosecution for tax fraud (French Tax Code, art. 1741). Read the analysis →

07

Exit from the regime — objective evidence

How to provide objective evidence of exit from the regime in order to switch to depreciation of the building. Read the analysis →

— 03

Our approach at the firm

The firm acts at every stage of the life cycle of the commitment: pre-acquisition analysis (characterisation of the transaction, choice of the most suitable commitment, drafting of the clauses in the preliminary agreement and the notarial deed), ongoing monitoring (timeline, formalities for extension, coordination with the notary), and litigation (response to proposed reassessments, contentious claim, proceedings before the tribunal judiciaire, which has jurisdiction over registration duties (Tax Procedure Code art. L. 199), then the court of appeal and the Cour de cassation).

Our depth of case-law experience on these topics, built up over hundreds of matters handled, allows us to secure transactions upstream and to defend taxpayers when the commitment is challenged.

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A property dealer transaction to secure?

A confidential initial discussion to analyse your project, choose the right commitment, secure the drafting of the deeds, or defend your interests in the event of a reassessment.

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© BENSAID Avocats — The information on this site does not constitute legal advice and cannot replace a personalised tax analysis.