How to Calculate Capital Gains Tax on Property Sales in France

Selling real estate in France, whether it’s a second home, investment property, or inherited asset, can trigger capital gains tax if the sale results in a profit. The French tax system defines capital gains as the difference between what was paid for the property and what it sells for, after certain adjustments for costs and allowances. 

Whether you are a French resident or a foreign owner, understanding how this tax is calculated is essential to planning your sale and anticipating your tax bill. Here’s a complete guide to breaking it down. 

What Is Capital Gains Tax in France?

In France, the tax on gains from selling property is made up of two parts:

1. Capital gains tax (CGT), a flat rate on the profit
2. Social charges, additional contributions applied to investment gains

Together, for most property sales, this results in an effective combined rate of 36.2%. 

This applies to most non-primary residences (such as second homes and investment properties). However, the calculation is not simply 36.2% of your profit, various deductions and allowances can reduce the taxable amount significantly depending on how long you’ve owned the property. 

Step-by-Step: How It’s Calculated

1. Determining Your Capital Gain

To begin, you need to calculate the gross capital gain:

Gross Capital Gain = Sale Price − Adjusted Purchase Price

The adjusted purchase price may include:

• The original purchase price of the property
• Notary fees and registration costs (actual amounts or a flat 7.5% if no receipts are available)
• Eligible improvement or renovation costs (with invoices) 

Once you have the gross gain, the next step is to factor in deductions for how long you’ve owned the property.

2. Allowances for Duration of Ownership

Income Tax Allowances

The standard 19% capital gains tax component is reduced progressively the longer you own the property:

• Years 1–5: no deduction
• Years 6–21: 6% reduction per year
• Year 22: final 4% reduction

This means that if you own a property for 22 years or more, you pay no income tax on the gain. 

Social Charges Allowances

Social charges, currently 17.2%, also benefit from a similar allowance, but with a longer schedule:

• Years 1–5: no reduction
• Years 6–21: 1.65% reduction per year
• Year 22: 1.60% deduction
• Years 23–30: 9% reduction per year

After 30 years of ownership, social charges are fully exempt. 

For non-residents from the European Economic Area (EEA) or Switzerland, a lower rate of 7.5% solidarity tax may apply instead of the full 17.2% under certain conditions. 

3. Exemptions That May Apply

Primary Residence

If the property you are selling is your main residence, French capital gains tax does not apply. This exemption applies regardless of how long you’ve owned the home. 

Small Sales and Long Ownership

Other exemptions or reductions include:

• Sales where the total gain is less than €15,000, no tax is due
• Full exemption from income tax after 22 years of ownership
• Full exemption from social charges after 30 years of ownership 

4. Additional Surtaxes on Large Gains

If the net taxable capital gain (after allowances) exceeds €50,000, an extra surtax may be applied. This “exceptional contribution” ranges from around 2% to 6% depending on the size of the gain. 

5. How It’s Paid

In practice, capital gains tax on French real estate is usually collected at the time of the sale by the notary handling the transaction. The notary calculates the tax and pays it directly to the French tax authorities on your behalf. 

However, you are still responsible for reporting the sale correctly on your tax return if required, especially for non-residents. Consult a tax professional to ensure compliance. 

What Owners Should Know

Foreign Sellers

If you’re not a French tax resident, France still taxes your capital gains on French property. You may also have obligations in your home country, though double taxation treaties often provide relief. 

Costs You Can Offset

To reduce your taxable gain, you can often include:

• Acquisition and sale costs (notary and agent fees)
• Improvement costs with invoices
• A standard 7.5% flat deduction for purchase costs if you don’t have receipts 

Summary: Capital Gains Tax at a Glance

Component	Standard Rate	Allowances	Full Exemption aAfter
Capital Gains Tax	19%	Yes	22 years ownership
Social Charges	17.2% (7.5% for some non-residents)	Yes	30 years ownership
Surtax	2-6%	No	N/A
Primary residence	Exempt	–	–

Planning Your Sale

The French capital gains tax regime is complex, but planning your sale and understanding your ownership timeline, as well as allowable deductions, can significantly reduce your tax burden and even eliminate it in certain cases.

Before selling, always:

• Confirm whether your property qualifies for exemptions
• Calculate allowable holding period reductions
• Document all eligible expenses and improvements
• Consult a qualified tax advisor, especially if you are a non-resident

 

 

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