A Complete Guide to Capital Gains Tax in France

In France, capital gains tax is the levy applied when you dispose of certain assets and make a profit, in other words, when the sale price exceeds what you originally paid. This can arise from selling real estate, shares and financial investments, business assets, or other types of capital-producing property. Understanding how this tax works, the rates involved, exemptions, and how to calculate it is crucial for planning and compliance. 

What Is Capital Gains Tax?

A capital gain occurs when you sell an asset for more than its acquisition price. In France, this gain is generally taxable unless a specific exemption applies (for example, on your main residence). The way the gain is taxed, and the rate you pay, depends on the type of asset and, for property, how long you’ve owned it. 

Although the rules vary by asset category, the broad principle remains the same: tax is levied on the profit you make, not on the total sale price. 

Capital Gains Tax on Financial Assets and Securities

For most financial investments, such as shares, bonds, exchange-traded funds, and similar securities, gains are taxed under what is known as the Prélèvement Forfaitaire Unique (PFU) or “flat tax”. This regime puts a standard rate of 30% on gains, which includes: 

• 12.8% income tax
• 17.2% social charges

There’s no holding-period deduction under the PFU, which means the same rate applies whether you’ve held the asset for a few months or several years. In some cases, you may have the option to elect taxation under the progressive income tax scale if that results in a lower tax liability, but this is subject to detailed rules. 

Cryptocurrencies and similar digital assets are generally treated like other securities under this regime, with occasional trading potentially being reclassified as professional income. 

Capital Gains Tax on Real Estate

When it comes to property, the rules are different from financial investments and are more complex because of various allowances and exemptions. In most cases, gains from selling real estate (such as a second home or investment property) are taxed separately from PFU rules at the following basic structure: 

1. Income tax component:
   • A flat rate of 19% applies to the taxable gain. 

2. Social contributions:
   • A further 17.2% is charged on the gain, unless a reduced levy applies for certain non-resident sellers under EU/EEA/Swiss rules. 

Together, this can lead to a total charge of up to 36.2% before considering any exemptions or allowances. 

Tax Surcharges on Large Gains

If the net taxable gain (after deductions) exceeds certain thresholds (e.g., over €50,000), an additional surtax may be applied ranging between 2% and 6%, increasing the overall tax due. 

How Exemptions and Reductions Work

Primary Residence

One of the most significant reliefs in French tax law is that your main home is generally exempt from capital gains tax, provided it is genuinely your principal residence at the time of sale. The exemption applies regardless of how long you’ve owned it. 

Length of Ownership (Taper Relief)

For non-primary property, France applies abatement for duration of ownership, which can reduce taxable gains:

• No exemption: First 5 years
• Progressive reductions: From year 6 onwards
• Full exemption from the income tax portion: After 22 years of ownership
• Full exemption from social charges: After 30 years of ownership 

This means that, over time, the taxable portion of gains diminishes and can eventually reach zero after long-term ownership. 

Calculating the Taxable Gain

For real estate, the net capital gain is generally calculated as:

Sale Price – (Adjusted Purchase Price + Eligible Costs)

Where “adjusted purchase price” may include certain acquisition costs, notary fees, and documented improvement expenses, which reduce the taxable gain. 

In some cases where costs are not documented, flat allowances may apply, but detailed invoices are usually preferred to maximize deductions. 

Non-Resident Sellers

If you are not a French tax resident, France still taxes gains arising from French property sales at the standard rates, but your social contributions might be limited depending on your country of residence: 

• EU/EEA/Swiss residents: Often pay a lower social levy (solidarity tax at 7.5%) instead of full social charges. 
• Non-EU/EEA residents: Typically pay the full 17.2% social charges unless a tax treaty specifies otherwise. 

Double tax treaties may allow crediting French tax paid against your home country tax obligation, helping avoid double taxation. 

Other Asset Classes and Special Rules

Land and Development Plots

For specific categories such as building land or development plots, special rules may apply where the gain is taxed differently, for example, at a percentage of the sale price rather than the usual gain calculation. This can result in effective lower taxation under specified conditions. 

Shares and Business Interests

Capital gains from selling business interests (excluding real estate companies) also fall under general capital gains rules, which may include PFU or the standard property regime depending on ownership structure and circumstances. 

Reporting and Payment

In practice, when selling property, the notary often handles the capital gains tax calculation and payment directly to French tax authorities during the closing process. However, taxpayers are still responsible for ensuring accurate reporting and compliance, especially where multiple assets or foreign tax treaties are involved. 

Summary

Asset Type	Typical Tax Regime	Rate / Notes
Financial investments (shares, bonds, etc.)	Flat tax (PFU)	30% total (12.8% tax + 17.2% social)
Real estate (not main residence)	Income tax + Social charges	19% + 17.2% (total 36.2%)
Main residence	Exempt	No CGT payable
Holding period relief	Reductions over time	Full income tax relief after 22 yrs
Large gains	Surtax applies	2–6% on gains over thresholds

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