Sell or rent: How to make the right choice?
Why prefer to sell?
It is advisable to sell your property:
- If you need money for a personal project.
- If the charges of the good are high.
- If the property no longer has credit and potential rental income on this property would increase your taxes.
- If the property is obsolete and it would cost a large sum to perform work and rent it.
- If the real estate market is at its peak and you feel that its value will not increase with the years.
- If you do not want to manage a tenant (unpaid, works, renewals …)
If the property is your principal residence and in the case of a sale, you can avoid taxation on the capital gain, which is not the case for a second home or investment property. It is therefore necessary to pay attention to the change of address of principal residence and use of the property. Indeed, if you rent the property in question after living there, in case of sale, you will have to pay the tax on the capital gain.
When to privilege renting?
It is better to consider renting:
- If you own your property for a short time and it is not your main residence because you will not enjoy the exemption on capital gains.
- If you need a monthly income supplement
- If the rental yield is interesting and you can create the property deficit.
- If real estate has fallen: renting can be a good alternative as prices rise.
If you decide to rent while waiting for a better personal or economic context to sell, you have every interest to rent furnished: the lease lasts only one year and therefore leaves you more freedom. It is also possible to sell occupied housing.
Sellers of a secondary residence who do not own their principal residence are, subject to certain conditions, exempt from property development tax. To allow those who want to become owners of their main residence using the sale price of their second home, an exemption is possible under certain conditions.