Capital Gains Tax on French Land Sales: Calculation Guide

---

Are you about to resell a piece of land you bought some years ago or inherited from a loved one? If you realise a capital gain on the sale, you want to know how it will be taxed. Winter Immobilier walks you through the different situations based on the land use, its zoning, and how you acquired it.

What is the capital gain on building land?

The capital gain on a building plot is the positive difference between the resale price of a buildable land and its purchase price (or estimated value at the time of inheritance). It is not uncommon for building land to appreciate over the years. A landowner can therefore realise significant capital gains by reselling a building plot whose value has risen since acquisition. Treated as income, the capital gain is taxed by the French state, under income tax (IR) and social contributions.

The rates are those of standard real estate capital gains tax, 19% under income tax and 17.2% in social contributions, that is 36.2% combined. The CSG increase voted for 2026, which brings social contributions on investment income to 18.6%, does not apply to real estate capital gains. The allowances for holding period are also the same as for a home: 6% per year from the 6th to the 21st year, then 4% in the 22nd year, for income tax; and 1.65%, then 1.60%, then 9% per year from the 23rd to the 30th year, for social contributions.

What sets land apart from other property

Three differences are worth knowing before you sell, because they change the final amount.

First, some good news. The surtax on capital gains above €50,000, running from 2% to 6% depending on the amount, does not apply to building land. The text expressly excludes it. On a sizeable sale, the saving runs into thousands of euros compared with an apartment sale generating the same capital gain.

Next, some less good news. The 15% flat-rate allowance for works, which lets a seller of a built property inflate their acquisition price without proof after 5 years of ownership, does not exist for undeveloped land. Actual works carried out on the land remain deductible on invoices, however, and road, utility and distribution network costs are added to the acquisition price at their real amount. The 7.5% flat rate for acquisition costs, on the other hand, applies as usual.

Finally, land that has become buildable can be subject to two taxes that exist nowhere else, and that add to the capital gains tax rather than replacing it. We detail them further below.

A lower tax rate on land sale capital gains

The French government started in 2018 to lower the tax on real estate capital gains tied to building land sales, with the aim of encouraging the construction of new housing and curbing the steady rise in property prices, by pushing landowners to sell. This first scheme, which offered an allowance of 70% to 85% on promises of sale signed between early 2018 and the end of 2020, has since ended. Plenty of content still online describes it as though it were still in force.

A successor scheme took its place, set out in Article 150 VE of the French General Tax Code and extended by the 2026 Finance Act. It remains open to promises of sale signed up to 31 December 2027, with the sale itself required by 31 December of the second year that follows. For building land, the allowance stands at 60% where the land lies in a municipality classified as a tight housing market, which is the case for Nice. It rises to 85% where the buyer commits to devoting at least half the surface of the development to social housing, a bail réel solidaire scheme, or intermediate housing.

One condition governs everything else, and it decides whether the allowance applies to you at all. The deed must record your buyer’s commitment to build collective residential buildings, completed within 4 years of the purchase, with a footprint of at least 75% of what the local urban plan (plan local d’urbanisme, PLU) allows. In other words, you can only claim it if you are selling to a developer or an operator. If your buyer is an individual who wants to build their own house on it, the allowance does not apply, whatever your land’s classification. The higher rate reserved for major urban development schemes, meanwhile, only applies to built properties.

Exemptions depending on the type of land

Non-buildable land, working agricultural land, and land acquired through inheritance or as a gift are specific cases with different exemption conditions.

Exemption on a non-buildable land capital gain

No special exemption or allowance applies to the capital gain on non-buildable land, beyond a set of ordinary exemptions. The first covers land sold for €15,000 or less, a threshold that applies to the sale price, not the gain, and that is assessed per share where the land is co-owned. The second is a sale carried out in the context of a public utility expropriation, provided the compensation is reinvested within 12 months. Land consolidation operations (remembrement) and sales to a social housing body are exempt as well.

The two taxes specific to land that has become buildable

One point comes up wrong very often, including in otherwise serious articles. You may read that a seller is exempt if the capital gain is less than 10 times the purchase price, or that land which became buildable before 13 January 2010 escapes tax altogether. Both claims mix up two different things.

These thresholds have nothing to do with the capital gains tax itself. They belong to two separate taxes that apply to the first sale of undeveloped land once it becomes buildable. Both come on top of income tax and social contributions, they never replace them.

• The national tax applies to land made buildable after 13 January 2010. It does not apply where the sale price is less than 10 times the purchase price. Above that, the rate is 5%, rising to 10% on the portion above 30 times the purchase price. Its taxable base shrinks by a tenth for each year beyond the 8th year following the land’s reclassification, so the tax disappears after 18 years

• The municipal tax only exists where the municipality has adopted it by resolution. Its rate is 10%, and its threshold is different: the sale price must reach at least 3 times the purchase price

The two can stack, and both stack with standard taxation. If your land is fully exempt from capital gains tax through the holding-period allowance, you can therefore still owe the national tax. Before selling land that has become buildable, ask the town hall the one question that matters most, whether the municipal tax has been adopted there. It will save you a bad surprise at the notary’s office.

Exemption on an agricultural land capital gain

When selling agricultural land, the capital gains tax depends on whether the land forms part of the seller’s private estate or business assets. If it falls under the private estate, the usual real estate capital gains tax applies (36.2%, with an allowance that varies with the holding period).

Where the land sits on a farmer’s business balance sheet, the professional capital gains regime takes over instead, and an exemption becomes possible. It is not automatic, however. You must have carried on the activity for at least 5 years, and your average annual revenue must stay under €350,000, with the exemption becoming partial between €350,000 and €450,000. These thresholds are raised to €450,000 and €550,000 where the sale is made to a young farmer. One important reservation applies on top: building land is excluded from this exemption regime, even where it is carried on the business’s balance sheet.

Exemption on an inherited land capital gain

Calculating the capital gain on inherited land or land received as a gift requires referring to the property’s market value as estimated at the time of acquisition. To this value should be added inheritance duties, notary fees and registration fees. The acquisition price increased accordingly reduces the taxable capital gain.

The exemption conditions on inherited land are the same as for any other acquisition. In particular, owners who have held the land for 22 years are exempt from income tax. Exemption from social contributions kicks in after 30 years of ownership.

For the rest, the method of calculation, the allowances and the deductible costs follow the same rules as for any other property, which we cover in detail in our article on real estate capital gains tax. If you are also selling a home, the rules for a capital gain on a second home are similar, though not identical.

Winter Immobilier guides your land sale in Nice

Land is valued differently from an apartment, and its price depends above all on what the local urban plan allows you to build on it. An estimate of your property gives you a realistic starting figure, and our page on selling a property in Nice covers the steps that follow.

Looking for more advice on land sales or the Nice property market? Get in touch with our estate agency in Nice Gambetta or reach one of our advisors directly by phone.