Excellent accompagnement de Maître Uzan. Très professionnel, disponible et clair dans ses conseils, notamment pour ma première déclaration fiscale en France après de nombreuses années à l'étranger. Dossier parfaitement suivi. Je recommande vivement.
Real Estate Capital Gains
Real estate capital gains: how are they calculated, taxed and optimised?
Tax lawyer in Paris – calculation, exemptions and defence in the event of a tax audit
Summary
- Taxable base: the difference between the sale price and the acquisition price, increased by acquisition costs and works (actual or flat-rate).
- Rates: 19% income tax and 17.2% social security contributions, i.e. 36.2%, plus a surtax of 2% to 6% on taxable gains above €50,000.
- Holding period: exemption from income tax after 22 years and from social security contributions after 30 years.
- Exemptions: main residence, first sale of another dwelling with reinvestment, sale price of €15,000 or less, certain retirees and persons with disabilities.
- Filing: the notary calculates, declares (form 2048-IMM) and pays the tax at the time of sale; the French tax authorities may audit this calculation.
What is a taxable real estate capital gain?
A real estate capital gain is the profit made when you sell a property for more than its purchase price or the value at which it entered your assets. It concerns individuals who sell built or unbuilt property, either directly or through a real estate partnership (société civile immobilière) subject to income tax.
This regime is set out in Articles 150 U to 150 VH of the French General Tax Code (CGI). It is complex and changes regularly. My work begins with a detailed analysis of your personal wealth situation and the planned transaction.
How is a real estate capital gain calculated?
The calculation starts from the sale price, reduced by the costs borne by the seller (property surveys, estate agent's commission payable by the seller, etc.). The acquisition price is then deducted, increased by:
- acquisition costs: the actual documented amount or a flat rate of 7.5% of the purchase price for an acquisition for consideration;
- works expenditure: construction, extension or improvement, based on invoices, or a flat rate of 15% of the purchase price if the property has been held for more than five years.
For a property received by gift or inheritance, the acquisition price is the value used to calculate transfer duties. For non-professional furnished rentals, depreciation previously deducted must now be added back (sales since 15 February 2025, with exceptions).
Well-documented works therefore increase the cost price and reduce the tax. They must, however, be eligible and substantiated: this is one of the points most frequently adjusted.
What are the rates and holding-period allowances?
The net capital gain is subject to income tax at the flat rate of 19% and to social security contributions at the rate of 17.2%. The CSG increase on investment income voted for 2026 does not apply to real estate capital gains.
Allowances reduce the taxable base from the sixth year of ownership:
| Holding period | Income tax (19%) | Social security contributions (17.2%) |
|---|---|---|
| Up to 5 years | No allowance | No allowance |
| From the 6th to the 21st year | 6% per year | 1.65% per year |
| 22nd full year | 4%: full exemption | 1.60% |
| From the 23rd to the 30th year | Exempt | 9% per year: full exemption after 30 years |
A surtax applies when the taxable capital gain, after allowances, exceeds €50,000. Its rate rises from 2% to 6% (Article 1609 nonies G of the CGI). It does not apply to building land.
Which sales are exempt from capital gains tax?
- Main residence: full exemption if the property is your main residence on the date of sale (or if the sale takes place within a normal period after you move out).
- First sale of a dwelling other than the main residence: exemption if you have not owned your main residence during the previous four years and you reinvest the proceeds, within 24 months, in the purchase or construction of your main residence, up to the amount reinvested.
- Sale price of €15,000 or less.
- Retirees and holders of a disability card on modest incomes, subject to conditions relating to reference taxable income and not being liable to the real estate wealth tax (impôt sur la fortune immobilière).
- Non-residents established in the European Union or the European Economic Area, for the sale of their former main residence in France, up to €150,000 of net capital gain and subject to time limits.
- Compulsory purchase, provided the compensation is reinvested.
These exemptions are subject to strict conditions. I help you check that they apply and gather the supporting documents before signing.
Who declares and pays real estate capital gains tax?
The notary calculates the capital gain, files return no. 2048-IMM and pays the tax when the deed is registered, by deduction from the sale price. You must then report the amount of the net capital gain on your income tax return (form 2042 C). It is thus included in your reference taxable income.
The notary's calculation is based on the information you provide. An error concerning works, the holding period or an exemption may be picked up by the French tax authorities during the limitation period for reassessment, in principle until the end of the third year following the year of sale (Article L. 169 of the Book of Tax Procedures (LPF)).
What should you do in the event of a tax audit on a real estate capital gain?
Real estate capital gains are regularly audited. The sensitive points are well known: whether the property was genuinely the main residence, substantiation of works, valuation of the property, costs deducted.
- Audit phase: I assist you from the request for information or the proposed tax reassessment onwards and prepare a reasoned and documented response.
- Litigation phase: if the disagreement persists, I file the claim and then represent you before the administrative court, from drafting the written submissions to the hearing.
To find out more, see my page tax audit: defending yourself.
Why use a tax lawyer?
- Before the sale: checking the calculation, the applicable exemptions and the supporting documents for works, to avoid costly mistakes.
- Optimisation: choosing the timing of the sale in light of the allowances, analysing suitable schemes and the consequences of holding the property through a real estate partnership (société civile immobilière).
- Transfer: advice on the gift or transfer of assets carrying capital gains, taking into account your wealth and family objectives.
- Defence: assistance in the event of an audit and representation in tax litigation.
- Personalised and confidential support: every situation is unique; your personal and financial information is protected by professional secrecy.
To review your situation, book an appointment.
FAQ
After how long is a real estate capital gain exempt?
Thanks to the holding-period allowances, the capital gain is exempt from income tax after 22 years of ownership and from social security contributions after 30 years.
Between 22 and 30 years, only social security contributions remain payable, on a reduced base.
Can I deduct works without invoices?
Yes, if the property has been held for more than five years: you may apply a flat rate of 15% of the acquisition price, without supporting documents.
If your actual expenditure is higher, you must substantiate it with invoices from businesses. Routine maintenance and repair works are not taken into account.
Is the sale of my main residence always exempt?
Yes, provided the property is your usual and actual residence on the date of sale. If you have moved out, the sale must take place within a normal period and the property must not have been rented out or occupied free of charge in the meantime.
The French tax authorities often check actual occupation: keep your supporting documents (bills, housing tax notices, correspondence).
What happens if the notary made a mistake in the calculation?
The seller remains liable for the tax. If the error is to your detriment, a claim may be filed within the statutory time limits to obtain a refund.
If it is in your favour, the French tax authorities may adjust the assessment during the limitation period for reassessment. A prompt analysis makes it possible to choose the best response.
Glossary
Cost price: acquisition price increased by acquisition costs and works.
Holding-period allowance: reduction of the taxable capital gain, increasing from the sixth year of ownership.
Surtax: additional tax of 2% to 6% on taxable capital gains exceeding €50,000.
2048-IMM: real estate capital gains return filed by the notary at the time of sale.
Limitation period for reassessment (délai de reprise): the period during which the French tax authorities may adjust the tax.
Further reading
- Articles 150 U to 150 VH of the CGI: regime for real estate capital gains of individuals.
- Article 200 B of the CGI: 19% tax rate.
- Article 1609 nonies G of the CGI: surtax on high capital gains.
- Article L. 169 of the LPF: limitation period for reassessment by the tax authorities.
- BOI-RFPI-PVI: administrative guidelines on real estate capital gains (BOFiP).
- Form no. 2048-IMM: real estate capital gains return.
- Tax litigation
- Property abroad
