Real estate capital gain tax in France

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When Do You Have to Pay Real Estate Capital Gains Tax?

Real estate capital gain is the profit you make when you resell a property, whether an apartment, a villa, or a plot of land on the Riviera, for more than you originally paid for it. This gain is taxable. The tax on your real estate capital gain must be settled on the very day you sign the deed of sale, and the notary collects it directly on behalf of the French Treasury.

In practice, you receive the proceeds of the sale on completion day with the capital gains tax already deducted. This tax applies to properties sold for more than 15,000 euros, other than your main home, that you have held for less than 30 years.

How to Calculate Real Estate Capital Gain

The Basis for Calculating the Real Estate Capital Gain

The capital gain is calculated based on the difference between the acquisition price and what the property is resold for. These figures can respectively be increased and reduced by taking into account various costs, such as acquisition and sale fees, work, or capital losses, which reduces the amount of the taxable capital gain. Allowances are also provided depending on how long you have held the property.

The calculation then differs according to the nature of the property and how it is held. The method is not the same for a second home, for building land, for a property sold as a viager, or for a property held through an SCI. Each of these cases follows its own rules for the taxable base and for exemptions.

The Tax Rate on Real Estate Capital Gains

Tax is charged on the amount of the capital gain after any allowances, calculated as the gap between the increased acquisition cost and the reduced resale amount. The capital gain is taxed both under social contributions and under income tax. The total tax rate, at 36.20%, is made up of a flat rate of 19% for income tax and 17.2% for social contributions.

An additional tax of 2 to 6% has applied since 2013 whenever the property is not building land and the net capital gain exceeds 50,000 euros. This surtax is calculated on the amount of the capital gain after allowances. The notary works out the taxable capital gain at the time of resale and withholds the tax from the proceeds to pass it on to the authorities. You are nonetheless required to report the amount of the capital gain on your annual income tax return.

Deductions from Real Estate Capital Gain

The taxable base of your real estate capital gain can be reduced in two ways, by deducting certain costs from the amount you sell for and by increasing the acquisition price.

Reduction of the Sale Price

On presentation of receipts, you can deduct from the sale price used to calculate the capital gain the costs paid at the time of the sale. This includes the cost of the various mandatory diagnostic reports. The main ones are the energy performance certificate, the asbestos report, and the lead report. Depending on the property, termite, natural, mining, technological, electrical, and gas safety reports may also apply.

In the exceptional case of the global resale of a building acquired in separate lots, you can also deduct a capital loss made on another lot from the capital gain. Finally, the amount used to calculate the capital gain is reduced by the VAT you paid.

Increase of the Acquisition Price

The acquisition price is increased by notary fees and registration duties. If you have no receipts, you can rely on a flat rate of 7.5% of the purchase amount instead, with no condition on how long you have held the property. Spending on work, such as construction, renovation, or extension, can also raise this figure, calculated either at actual cost or on a flat-rate basis. Only work carried out by a company, invoiced and subject to VAT, is deductible from the capital gain. Maintenance and repair costs cannot be taken into account.

When you cannot document the actual cost of the work, you can instead increase the acquisition price by a flat rate of 15%, provided you have held the property for more than 5 years.

This five-year condition deserves your attention, because it is often misread. It applies only to the 15% flat rate, and only to built properties. If you had work carried out by a company and you keep the invoices, the actual cost is deductible with no condition on how long you have held the property. This holds true even if you resell just two years after buying.

How Many Years Before You Stop Paying Capital Gains Tax?

How long you have held the property affects the amount on which the capital gains tax is calculated, because the allowance rate depends on the number of years of ownership. No allowance applies up to and including the 5th year of ownership. From the 6th to the 21st year, an allowance of 6% applies for income tax and 1.65% for social contributions. In the 22nd year, the allowance rises to 4% for income tax and 1.6% for social contributions. Beyond 22 years of ownership, income tax is fully waived, while social contributions continue to benefit from a 9% allowance per year from the 23rd to the 30th year. Full exemption, from both income tax and social contributions, is only reached beyond 30 years of ownership.

You can check both these milestones by doing the maths yourself, and the official allowance schedule confirms them. For income tax, sixteen years at 6% followed by one year at 4% add up to exactly 100% by the end of the 22nd year. For social contributions, sixteen years at 1.65%, one year at 1.60%, then eight years at 9% also add up to 100%, but only by the end of the 30th year. If you have owned your property for 25 years, for instance, you escape income tax altogether while remaining liable for social contributions.

In What Cases Are You Exempt From Real Estate Capital Gains Tax?

Length of ownership is not the only route to exemption. Several situations exempt sellers entirely or partially, and many owners are unaware of them until the day they sign. The question comes up more often here than elsewhere, given the Riviera’s unique concentration of second-home and non-resident owners. In the Alpes-Maritimes, second homes account for a quarter of all housing, against fewer than one in ten nationally. In other words, one home in four in the department falls outside the main-residence exemption by definition.

Selling Your Main Home

This is the broadest case. If you sell your main home, your capital gain is fully exempt, provided the property is genuinely your usual residence on the day of the sale. Immediate and necessary outbuildings, a garage or a cellar for instance, follow the same treatment if you sell them at the same time. You remain covered even if you have already moved out and the property is on the market. The delay simply needs to stay reasonable, generally around one year in a normal market according to the tax authorities.

A Sale Price of 15,000 Euros or Less

If you sell a property for 15,000 euros or less, you are exempt. Read this threshold carefully, it applies to your sale price, not to the amount of your gain. Selling a property for 200,000 euros that nets you 3,000 euros in capital gain gives you no exemption at all. If you hold the property in co-ownership, the threshold is assessed on your own share, which can exempt you without exempting your co-owners.

The First Sale of a Home That Is Not Your Main Residence

This mechanism is little known and often misrepresented. You can claim it if you have not owned your main home, directly or indirectly, at any point during the four years before the sale. You must also reinvest the proceeds in buying or building your main home within 24 months, and you can only use this exemption once in your lifetime.

One point matters enormously for the calculation. Your exemption is proportional to the amount you actually reinvest, it is not automatically total. If you reinvest 180,000 euros out of a sale of 300,000 euros, that is 60%, you only exempt 60% of your capital gain. The remainder stays taxable.

Retirees and Holders of a Disability Card

If you hold an old-age pension or a disability card, the carte mobilité inclusion with an invalidité mention, you may be exempt under two cumulative conditions. You must not be liable for the real estate wealth tax, known as the IFI. Your reference tax income from two years before the sale must also stay under the threshold set by Article 1417 of the French General Tax Code. For a sale you complete in 2026, that means your 2024 reference tax income capped at 12,679 euros for the first part of your household, plus 3,386 euros for each additional half-part.

Selling From Abroad, the Non-Resident Regime

This case concerns a good share of our clients directly, and it follows rules of its own that you should know before you put a property on the market.

If you sell from abroad, you may qualify for an exemption on the first 150,000 euros of net capital gain, once only, for a single property. Three conditions apply together. You must be a national of a European Union or European Economic Area state bound to France by an administrative assistance agreement. You must also have been a French tax resident continuously for at least 2 years at some point. Finally, you must sell within a set time limit.

That time limit has just been extended. It used to be 5 years, and is now 10 years after you transferred your tax residence out of France, under the 2026 finance law, in force since 21 February 2026. If you have kept free use of your property since the 1st of January of the year before the sale, no time limit applies at all.

A common confusion is worth clearing up here. The test that matters is your nationality, not your current country of residence. A French or Italian national living in the United States remains eligible. An American or Swiss national living in Europe is not, unless they also hold a European nationality. A separate mechanism, reserved for a former main home, works the other way round and looks at your destination country instead, with a much shorter time limit.

Social contributions follow their own rule. If you are affiliated with the social security scheme of another European Union or European Economic Area state, of Switzerland, or of the United Kingdom, you owe neither CSG nor CRDS. Only the solidarity levy remains due, 7.5% instead of 17.2%. If you are affiliated outside this zone, you remain subject to the full rate.

Winter Immobilier Advises You on Your Future Property Sale in Nice

Would you like more advice on selling property, and in particular to discover the current trends shaping Nice’s vibrant property market? Feel free to visit our real estate agency in Nice Gambetta or to get in touch directly with one of our advisors by phone.

Would you rather start with a ballpark figure before committing to anything? Our free property estimate gives you a starting point, so the capital gains calculation that follows rests on real figures rather than a guess.