The Granting of a Lease on a Building or

Application pratique:

This case law confirms that a new lease granted after a free occupancy is not an assignment of leasehold rights. Therefore, transfer taxes under Article 725 of the French General Tax Code do not apply. The landlord should resist any tax reassessment and provide evidence that the prior occupant was not a tenant (e.g., no rent paid, no lease agreement). Keep all documents showing the free occupation arrangement.

Application pratique:

According to this case, if the seller was occupying free of charge (not as a tenant), the transfer is not an assignment of leasehold rights. The buyer should request written proof from the seller that no rent was paid and no lease agreement existed. If confirmed, no transfer taxes under Article 725 apply. The buyer should ask the notary to apply this case law to avoid unnecessary tax.

Application pratique:

This case law supports the co-owner's position: a lease after free occupancy is not an assignment. The co-owner should formally object to the tax assessment, citing this decision. Provide evidence that the previous occupant paid no rent and had no lease. The co-owner may also seek legal advice to challenge the reclassification and avoid paying the tax.