Real estate tax lawyer Paris: structuring the deal before signing.

The promise already fixes the essentials: who is buying, at what price, on what conditions and with what tax undertaking. After the notarial deed, registration duties have arisen and most choices can no longer be changed without cost. The notary must inform the parties about the deed in which they take part, and this advice is owed spontaneously before their final commitment. The Court of Cassation recalls that "The notary is bound to inform and advise the parties, fully and in detail, on the scope and effects, in particular as to the tax consequences, of the deed in which he takes part" (our translation) (Cass. 1re civ., 28 May 2025, No. 23-18.737). In that case, additional taxes owed by the sellers could be determined as early as the promise, and the judgment that had ruled out fault on the part of the notary was overturned. A lawyer can complete this analysis across the whole transaction: comparing acquisition structures, checking the feasibility of an undertaking to resell or to build, drafting the tax clauses and, if doubt remains, preparing a request for a safeguard from the tax authority before signing.

The exemption from transfer duties granted to a buyer subject to VAT who undertakes to resell is conditional (Article 1115 of the French General Tax Code). If the building is not resold within the time limit, the favourable regime falls away. The Court of Cassation holds that "forfeiture of the favourable regime provided for in Article 1115 above has the effect of making payable the transfer duties from which the buyer was exempt by reason of its undertaking to resell" (our translation) (Cass. com., 6 November 2024, No. 23-11.616). It adds that late-payment interest runs from the first day following the month in which the duties should have been paid, and not from the expiry of the resale period. The ruling, unfavourable to the buyer, increases the cost of a delay in selling. Before the deed, the resale timetable must therefore be tested against real constraints: authorisations, division, occupation of the lots, market conditions. The firm quantifies this risk and examines the solutions provided by law, such as substituting an undertaking to build, before the period ends.

The period runs from the acquisition, whether it is the ordinary five-year period or the period reduced to two years. The text provides for this reduced period for resales in lots that trigger the right of pre-emption of tenants or occupants provided for by the Act of 31 December 1975 or the Act of 6 July 1989 (Article 1115 of the General Tax Code). The Court of Cassation has confirmed this: the period, "whether it is the five-year period provided for in the first paragraph of Article 1115 of the General Tax Code or the period reduced to two years provided for in the last paragraph of that text, runs from the acquisition of the building" (our translation) (Cass. com., 14 February 2024, No. 22-17.541). The property dealer's appeal to the Court of Cassation was dismissed. The Court also noted that the right of pre-emption had been triggered by the notification of the offers of sale to the tenants. For a break-up sale of a building, the timetable must therefore be built from the date of the purchase deed, allowing for the periods for offers to occupants and the time needed for their replies. A timetable that is too tight exposes the buyer to transfer duties increased by late-payment interest.

Yes, under the conditions set by law. A buyer subject to VAT who has undertaken in the deed to carry out within four years the works producing a new building may obtain, on request, a renewable yearly extension of that period; the absence of a reasoned refusal within two months of receipt of the request amounts to acceptance (Article 1594-0 G of the French General Tax Code). The same text allows, within a limit of five years from the giving of the first undertaking, an undertaking to resell to be substituted for it, and conversely an undertaking to resell to be replaced by an undertaking to build before it falls due. The request for extension, reasoned and sent by registered letter, must be made at the latest within the month following the expiry of the period previously granted (Article 266 bis of Annex III to the General Tax Code). By contrast, the force majeure that would excuse forfeiture must be established rigorously. The Court of Cassation overturned a judgment that had accepted an impossibility of building, noting that it had ruled "on grounds unsuited to establishing the absolute and definitive impossibility of building for the company" (our translation) (Cass. com., 15 March 2023, No. 21-11.876). The decision is unfavourable to the buyer. The firm therefore keeps a schedule from the moment of signing and prepares the requests for extension or substitution before the period expires, rather than relying on force majeure being recognised.

The current text allows the next buyer to take over the undertaking to build given by the transferor, the period granted to the latter then binding the buyer (Article 1594-0 G of the General Tax Code). This option releases no one from keeping their own undertaking. Under the former Article 691 of the General Tax Code, the Court of Cassation held that "the mere fact of having given the undertaking to build that gave rise to reduced taxation binds these persons individually towards the tax authority" (our translation) (Cass. com., 28 November 2006, No. 04-19.939). The acquiring company, which had not built within four years, forfeited the favourable regime and force majeure was rejected for want of justified steps during the period. This unfavourable decision is old and was made under a text that is no longer in force, but it shows the logic of the review: each buyer answers for the undertaking set out in its own deed. Before buying land already burdened by an undertaking, one must obtain the earlier deed, know the date on which the period started and check how much time really remains to carry out the works.

A civil-law company that habitually buys buildings with a view to reselling them carries on a commercial activity and becomes liable to corporation tax (Article 35 of the General Tax Code, Article 206). Intent is judged on the day of purchase, from documents often drafted without regard to tax. In a case decided on 1 October 2026, the Paris Administrative Court of Appeal found speculative intent relying on minutes of a meeting predating the acquisition, which provided for consulting an architect on the number of flats according to the market, and on a sale mandate given shortly afterwards (CAA Paris, 1 October 2026, No. 25PA00600). The partners' application was dismissed and the company's liability to corporation tax upheld. This unfavourable ruling on its facts sets no general rule: it merely shows the weight of internal documents. Before the purchase, the firm re-reads the corporate purpose, the draft decisions and the mandates, and checks that the announced asset-management plan matches what the company will actually do.

In principle, yes. The direct or indirect letting of furnished residential premises falls under industrial and commercial profits (Article 35 of the General Tax Code). When a civil-law company carries on this activity itself, it carries out a commercial operation and becomes liable to corporation tax (Article 206). The Court of Cassation states it plainly: "property holding companies (sociétés civiles immobilières) are automatically subject to corporation tax when they carry on a commercial or industrial activity" (our translation) (Cass. com., 2 April 2025, No. 24-11.202). In that case, the partner's shares were not accepted as business assets for the purposes of the former wealth tax (impôt de solidarité sur la fortune), and the appeal to the Court of Cassation was dismissed. The tax authority nevertheless accepts that the civil-law company escapes that tax as long as its commercial receipts excluding VAT do not exceed 10% of its total receipts, with a four-year average in the event of an occasional excess (BOI-IS-CHAMP-10-30, §§ 320 and 330). The practical consequence is settled before the purchase: choose whether the furnished letting will be carried on by the company, by a partner or by a separate structure, and measure the effect of that choice on the taxation of rents, of the resale and of distributions. For a voluntary election, Article 239 of the same Code sets the notification period and the conditions for withdrawal (Article 239).

Where the transaction rests on an uncertain assessment of the facts, the safeguard is requested before the deed. The tax authority rules within three months when a taxpayer acting in good faith submits a written, precise and complete request, and its formal position is then binding on it (Article L. 80 B of the Book of Tax Procedures). For an arrangement exposed to abuse of law, a specific procedure exists: if the central tax administration, consulted in writing before the acts are concluded with all the relevant information, has not replied within six months, the procedures of Articles L. 64 and L. 64 A do not apply (Article L. 64 B). These periods must be built into the timetable of the promise to sell, for example by means of a condition precedent or a suitable date for the final deed. The safeguard applies only to the situation described: an incomplete request, or facts different from those set out, deprive it of effect. The firm drafts the request from the documents of the transaction and checks that the signed deed remains consistent with what was presented.

It protects according to its terms and as of its date. A taxpayer who has applied a text according to the interpretation published by the tax authority may rely on it, but only according to the content of that guidance at the time of the taxation. The Court of Cassation holds that the guidance relied on by the taxpayer "can be applied only according to its terms and content in force at the time of the taxation in dispute" (our translation) (Cass. com., 10 April 2019, No. 16-28.327). It overturned the judgment that had applied an instruction of 18 April 2011 to taxation whose chargeable event predated it, a ruling unfavourable to the taxpayer. For registration duties, the chargeable event is the transfer deed; an instruction issued after the deed therefore cannot be relied on (Cass. com., 14 February 2024, No. 22-17.541). The administrative commentary on the regime for purchases intended for resale, BOI-ENR-DMTOI-10-50, also recalls that the beneficiary must have filed the declaration of existence provided for by the Code. Before the deed, the firm therefore notes the guidance published on the planned date of signing and keeps its dated version on file.

The tax authority may disregard sham acts and those which, seeking a literal application of the texts against the objective of their authors, could have been inspired only by the motive of avoiding or reducing tax (Article L. 64 of the Book of Tax Procedures). Since 2021, a second text targets acts whose principal motive is tax-related, under the same condition relating to the objectives of the texts (Article L. 64 A). In the event of disagreement, the tax abuse-of-law committee may be asked to give its opinion. A contribution, a split of ownership or a gift preceding a sale must therefore have a genuine economic or family reason, expressed in the deeds and demonstrated afterwards. The Court of Cassation also requires advice on the risks: "the lawyer is under an obligation to draw the client's attention to the uncertainties of the positive law on the day of the intervention and to the risks that may affect the validity or effectiveness of the planned transaction" (our translation) (Cass. 1re civ., 25 June 2025, No. 23-16.629). The firm sets out these risks in writing before the deed and examines whether a prior consultation of the central tax administration would be useful.

Under Article 726 of the General Tax Code as worded in 2012, the Court of Cassation answered in the negative. It holds that a usufructuary is not a partner and that "the transfer of the usufruct of corporate rights, which does not entail a transfer of ownership of the corporate rights, is not subject to the registration duty applicable to transfers of corporate rights" (our translation) (Cass. com., 30 November 2022, No. 20-18.884). Ruling on the merits, it discharged the duties claimed from the transferee company, a ruling favourable to the taxpayer. Its scope must be measured precisely. It concerns only the duty on transfers of corporate rights and says nothing of the other taxes arising on the transaction, nor of the risk of abuse of law if the split of ownership had no motive other than tax. It was delivered under an earlier version of the text; Article 726 in force since 1 January 2024 still covers transfers of corporate rights without mentioning the usufruct, but its wording must be checked on the day of the deed. Before signing a temporary usufruct transfer, the firm examines the articles of association, the allocation of voting and profit rights, the price used and the economic reasons for the split of ownership.

The answer depends on what the contract says about that advantage. A mistake as to a mere motive does not lead to nullity, unless the parties have expressly made it a determining element of their consent (Article 1135 of the French Civil Code). Hence the value of stating, before signing, that eligibility for the scheme is a condition of the purchase. Where there is no nullity, a liability claim remains possible. The Court of Cassation holds that "the dismissal of the principal claim for nullity of the sale for fraudulent misrepresentation brought against the seller does not preclude an alternative claim in quasi-tort liability against the professional in charge of marketing" (our translation) (Cass. 3e civ., 14 January 2021, No. 19-24.881). As to the limitation period for a tax-driven rental investment, it holds that "the damage can become apparent to the buyer only from facts capable of revealing to them the impossibility of obtaining the return expected when the contract was concluded" (our translation) (Cass. 3e civ., 26 October 2022, No. 21-19.900). That judgment, delivered under the former Article L. 110-4 of the Commercial Code, concerns the liability claim; today, personal actions are subject to a limitation period of five years from the facts known or that should have been known (Article 2224 of the Civil Code). Keep the brochure, the simulations, the reservation contract and the correspondence, which will serve to establish what had been presented.

Not necessarily. In a published judgment, the Court of Cassation upheld the finding of fault against a lawyer who had concluded peremptorily that a transaction carried no risk, but it overturned the assessment of the loss (Cass. 1re civ., 25 June 2025, No. 23-16.629). It recalls that tax lawfully due is not a recoverable loss and that "compensation linked to a tax reassessment is limited to the surcharges and penalties it has entailed" (our translation) (Cass. 1re civ., 25 June 2025, No. 23-16.629), unless it is established that, properly advised, the taxpayer would not have been exposed to the tax or would have paid less. In that case, concerning a deferral of taxation that was called into question, the loss of a chance had to be measured by reference to the tax foreseeable at the end of the deferral and the penalties, and not as a percentage of the principal of the reassessment. For the client, this ruling is unfavourable: an action against the adviser does not replace a properly structured transaction. The most effective protection remains preventive, through a written analysis of the risks before the deed, precise drafting of the undertakings and, where necessary, a request for a safeguard sent to the tax authority.

The wording of the texts changes on 1 January 2027, which makes it necessary to check the version referred to in the deed. The published versions of Articles 1115 and 1594-0 G of the General Tax Code applicable on that date refer to Article L. 211-23 of the Code of Taxes on Goods and Services to define who is subject to VAT, instead of Article 256 A of the General Tax Code, and Article 1594-0 G refers to Article L. 231-12 of the same Code for the notion of a new building. For real estate VAT, Légifrance indicates that the content of Article 268, on the taxable margin basis, is carried over into Articles L. 231-18 to L. 231-20 of that Code from 1 January 2027. As at 1 November 2026, comparison of the two published versions shows only these changes of cross-reference for undertakings to resell and to build, but the deed, the filings and the requests for extension must cite the right references. For registration duties, the chargeable event remains the transfer deed, which ties the transaction to the text in force on the day of signing. The firm checks the applicable version at each stage, from the promise to sell to the expiry of the undertaking, and flags any amendment published in the meantime.