France: property capital gains tax, allowances and exemptions

What is taxed

The gross capital gain is the difference between the sale price and the purchase price. The sale price is the one in the deed, reduced by the selling costs you pay, on proof: agency fees, mandatory diagnostics, mortgage release costs.

The purchase price is the purchase price in the deed, increased by the acquisition costs (notary fees and duties, for their actual amount or for a flat rate of 7.5% of the price) and by works (actual amount with invoices, or a flat rate of 15% of the purchase price if you have held the property for more than 5 years). The flat rate is an option: you use the more favorable one.

A capital loss can only be set against a gain on another property in exceptional cases, for example the sale in a single block of a building acquired in successive parts.

What time takes off: the allowances

An allowance applies for each year held beyond the fifth. Years are counted in complete twelve-month periods, from the date of the purchase deed to the date of the sale deed.

For income tax: 6% a year from the 6th to the 21st year and 4% in the 22nd, hence a total exemption after 22 years. For social contributions: 1.65% a year from the 6th to the 21st year, 1.60% in the 22nd, then 9% a year from the 23rd to the 30th, hence an exemption after 30 years.

For €10,000 of gain after 10 years, the income tax base is €7,000 (30% allowance) and the social contributions base is €9,175 (8.25%). After 25 years, income tax disappears and social contributions apply to €4,500 (55% allowance).

The rates and the surtax on high gains

The taxable gain, after the allowance, is taxed at 19% for income tax and 17.2% for social contributions: €7,240 for €20,000 of gain with no allowance. The two bases are different, because the allowances are not the same.

A surtax of 2% to 6% is added as soon as the gain taxable to income tax exceeds €50,000. Its scale smooths the step: €2,442 for €103,400 of gain. The threshold is assessed per seller: for a married couple selling a jointly owned property, each has half of the gain, which may be enough to fall under the threshold.

When you pay nothing

Several situations exempt the gain, most of them under conditions:

• The main residence and its outbuildings, if it is your usual and actual home at the time of the sale.
• The first sale of a home other than the main residence, in proportion to the price you use, within 2 years, to buy or build your main residence, if you did not own one in the previous 4 years. With €180,000 reinvested out of a price of €300,000 and €120,000 of gain, 60% of the gain is exempt, that is €72,000.
• A property held for more than 22 years (income tax) or more than 30 years (social contributions), and a property sold for €15,000 or less.
• Under income conditions, retirees or holders of a mobility inclusion card, and residents of care homes (Ehpad) or institutions for disabled people.

Who calculates, who pays, who declares

The notary in charge of the sale deals with the tax authority, calculates the taxable gain and the tax, prepares the return and pays the tax to the land registry services. You then state on your income tax return the amount of the gain declared by the notary and, for a first sale, the exempt amount.

The exemption for the first sale applies at your request, by a mention in the sale deed, and only once.

Cases that change the calculation

A property received by gift or inheritance has as its purchase price the value used for duties. A furnished let by a non-professional landlord has the depreciation deducted added back to the purchase price for sales since February 15, 2025. Building land and non-residents have their own rules, with a tax representative in most cases.