Taxation of Real Estate Capital Gains in France

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If you sell a property in France for more than you paid, the difference is considered a capital gain—and in most cases, it’s taxable. However, some exemptions or tax reductions may apply, especially if the property is your main residence or meets specific legal criteria. Here’s what you need to know.

What Is a Real Estate Capital Gain?

A real estate capital gain arises when you sell a property at a higher price than what you originally paid.

How to calculate it:

Capital gain = Sale price – Purchase price

If the result is positive, you’ve made a gain. If it’s negative, you’ve incurred a loss.

Example:

  • Property purchased for €100,000

  • Sold for €120,000 → Capital gain = €20,000

  • Sold for €90,000 → Capital loss = €10,000

How Is the Gain Taxed?

Capital gains on property are subject to two main taxes:

  • Income tax

  • Social contributions

The amount owed depends on various factors including how long you’ve owned the property and whether you qualify for any exemptions.

Which Transactions Are Subject to Capital Gains Tax?

You’re liable for capital gains tax on real estate when selling or transferring property as part of your private assets. This includes:

  • Sales of houses, apartments, plots of land, or forests

  • Transfers of property rights such as usufruct, bare ownership, or easements

  • Disposals via real estate companies (e.g., non-commercial real estate entities or funds)

  • Swaps, divisions, or transfers of property as part of legal settlements

💡 Note: This applies whether you are a resident or non-resident of France. The full tax is applied in the year the sale takes place, regardless of payment method (e.g., life annuity sales).

Is There an Exemption for Selling Your Primary Residence?

Yes. If the property sold is your main home, the capital gain is fully exempt from both income tax and social contributions.

This exemption includes adjacent structures (garage, cellar, parking space, etc.) provided they are sold together with the home.

To qualify, the property must be:

  • Your actual, habitual residence at the time of sale

  • Occupied by at least one of the owners (in case of divorce or separation) until the sale

Other Exemptions from Capital Gains Tax

Exemptions may apply based on:

1. Property-Related Criteria

You may qualify for exemption on a secondary residence sale if:

  • You reinvest the full sale price into purchasing or building your main home within 2 years, and

  • You haven’t owned a principal residence in the past 4 years

✅ In all cases, properties held for more than 22 years are exempt from income tax on capital gains
✅ After 30 years, you are also exempt from social contributions

Additional exemptions include:

  • Properties sold for less than €15,000

  • Rights to add additional stories (elevation rights) sold before December 31, 2026

  • Property exchanges as part of certain land restructuring projects

2. Seller-Based Exemptions

You may be exempt under certain personal conditions, such as if:

  • You receive a retirement pension

  • You hold a Mobility Inclusion Card (MIC)

  • You reside in a care facility (for seniors or adults with disabilities)

  • You are a non-resident

Each case is subject to specific requirements.

3. Buyer-Based Exemptions

Capital gains may also be exempt depending on who buys the property and the intended use:

  • If sold to a public or private entity committed to building social housing (until December 31, 2025)

  • If the property is expropriated, provided all compensation is reinvested in real estate projects within 12 months

  • If the sale involves land to be used for intermediate housing in areas under housing pressure (zones A, A bis, or B1)

A tool is available to check your commune’s classification: A, Abis, B1, B2, or C.

Final Note

If you’re planning to sell property in France, it’s important to assess the potential capital gains and whether exemptions may apply based on your situation, the buyer, and how long you’ve owned the asset. Proper planning can significantly reduce or eliminate the taxes due.