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Income tax - Real estate capital gains

Verified 07 April 2022 - Legal and Administrative Information Directorate (Prime Minister)

The capital gain you realise by selling real estate is taxable, except for your principal residence. You can benefit from exemptions depending on the nature of the property or your personal situation.

You are subject to income tax for capital gains realised in the course of the management of your private property in the following cases:

  • Sale of real estate (flat, house, land)
  • Sale of rights attaching to real property (easements for example)
  • Sale through a civil real estate business (not subject to business tax) or a real estate investment fund (FPI)
  • Exchange of goods, sharing or business

Please note

real estate surplus value is subject to social.

The main exemptions from capital gains tax on real estate are related to the nature of the property sold, the quality of the seller and the purchaser.

Most exemptions are conditional.

Exemptions from the transferred property

You are exempt in the following cases:

  • Sale of main residence and outbuildings (garages, parking areas, courses, etc.)
  • Sale of a home other than the principal residence, if you use the sale price to buy or build your principal home within 2 years
    In addition, you must not have owned your principal residence in the 4 years preceding the sale.
  • Sale of an elevation right until 31 December 2022
  • Exchanged under certain consolidation operations
  • Property with a selling price not exceeding €15 000
  • Well held for more than 22 years

Please note

property that has been held for more than 30 years is also exempt from social security contributions.

Buyer Exemptions

You are exempt in the following cases:

  • Property sold directly or indirectly to a social housing agency (until December 31, 2022)
  • Sold to a private operator who undertakes to realise or complete social housing (until 31 December 2022)
  • Property expropriated on condition that all compensation is repaid by the acquisition, construction, reconstruction or extension of one or more buildings within 12 months
  • Property transferred by an individual who has exercised his or her right of abandonment under certain conditions, subject to the full cost of the transfer being repaid by the acquisition, construction, reconstruction or extension of one or more buildings within 12 months

Seller Exemptions

You may be exempt if you are in one of the following situations:

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You receive an old age pension

You are exempt if your income does not exceed €11,276 for 1re share family quotient (+ €3,011 per additional half share) in 2020 for an assignment in 2022.

You must not be subject to theIFI: titleContent.

You have a mobility inclusion card (CMI)

You are exempt if your income does not exceed €11,276 for 1re share family quotient (+ €3,011 per additional half share) in 2020 for an assignment in 2022.

You must not be subject to theIFI: titleContent.

You live in an elderly care facility

You are exempt, subject to conditions, in the event of the transfer of your former principal residence.

Your income must not exceed €26,462 for 1re share family quotient (+ €6,182 for 1re additional half share and €4,867 for the next half-shares) in 2020 for a sale in 2022.

You must not be subject to theIFI: titleContent.

You are staying in an accommodation for disabled adults

You are exempt, subject to conditions, in the event of the transfer of your former principal residence.

Your income must not exceed €26,462 for 1re share family quotient (+ €6,182 for 1re additional half share and €4,867 for the next half-shares) in 2020 for a sale in 2022.

You must not be subject to theIFI: titleContent.

You are a non-resident of France

You're exonerated.

You did not own your principal residence in the previous 4 years

The sale of a dwelling other than the principal residence is exempt. But you must use the sale price to buy or build your main home within 2 years.

The capital gain is equal to the difference between the following amounts:

  • Sales price of the property
  • Asset acquisition price

If you realise a capital loss, you can deduct it from a capital gain realised when you sell another property only exceptionally. For example: block sale of a building acquired by successive fractions.

Sales price

The selling price is the price indicated in the deed.

You can deduct from the price, on supporting documents, the fees paid at the time of the sale (for example, the fees related to the required diagnostics).

The selling price must be increased by the amounts paid to your profit (for example, a predatory payment made by the buyer to the current tenant).

Acquisition price

Good

If you bought the property, the purchase price is indicated in the bill of sale.

The following fees may be increased, upon proof:

  • Expenses and allowances paid to the seller on purchase
  • Acquisition fees (registration fees, notary fees). If you cannot justify them, you can deduct a lump sum of 7.5% the purchase price.
  • Construction expenditure (construction, reconstruction, expansion, improvement under conditions). For property held for more than 5 years, you can deduct either the actual amount justified or a lump sum payment 15% the purchase price.
  • Road, network and distribution costs (e.g. development costs for housing development)
Received Free

If you received the property by gift or estate, the acquisition price is the value used to calculate the estate or donation rights.

Slackening

The surplus value is reduced by abasement which depends on the time you owned the property.

The plate is different for the calculation of income tax and social levies.

Discount rate for the sale of real estate

Detention period

Reduction rate per year of detention

Income Tax Base

Social tax base

Under 6 years

0

0

From 6e to 21e year

6%

1.65%

22e past year

4%

1.6%

Beyond 22e year

Exemption

9%

Beyond 30e year

Exemption

Exemption

Example :

You sold a property that you had owned for 10 years. You have realised with this sale a surplus value of €10 000.

  • You receive a tax rebate on 6% per year ofe to 10e year 30% (6% x 5). This will give you a discount of €10 000 x 30%either €3,000. You will then report income €7 000 ( €10 000 - €3,000).
  • You benefit from a deduction on social contributions from 1.65% per year ofe to 10e year 8,25% (1.65% x 5). This will give you a discount of €10 000 x 8,25% either €825. You will have to pay social levies on the basis of €9,175 (€10 000 - €825).

Exceptional drop

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Slaughter linked to city planning or revitalisation operations

An exceptional reduction of 70% shall apply in areas covered by a major city planning operation or a revitalisation operation.

The purchaser undertakes to demolish the existing buildings to reconstruct one or more collective housing buildings, under certain conditions.

Promise to sell must be signed between 1to January 2021 and December 31, 2023.

The allowance is applicable to determine the base of income tax and social levies.

This allowance shall apply to the capital gain depending on the duration of the holding of the property.

It may be increased to 85% if social housing (or intermediate housing) represents at least 50% of the total surface of the buildings.

The allowance may not apply if the seller and buyer have family ties (for example, if they are couple).

FYI  

the construction work must be completed within 4 years from the date of acquisition.

Exceptional slackening in tense zone

An exceptional reduction of 70% applies in zones A or A bis where the purchaser undertakes to demolish existing buildings in order to reconstruct one or more collective buildings, under certain conditions.

Promise to sell must be signed between the 1to January 2018 and December 31, 2020.

The transfer must be completed by 31 December 2022.

To find out whether the accommodation is in zone A or A bis, you can use the following online service:

Know the area of your town: A, Abis, B1, B2 or C

The allowance is applicable to determine the base of income tax and social levies.

This allowance shall apply to the capital gain depending on the duration of the holding of the property.

It may be increased to 85% if social housing at least 50% of the total surface of the buildings.

The allowance may not apply if the seller and buyer have family ties (for example, if they are couple).

FYI  

the construction work must be completed within 4 years from the date of acquisition.

Tax rate

Capital gain is taxed on income tax at the rate of 19%.

Example :

For a taxable capital gain of €20,000, income tax is €3,800 (€20,000 x 19%).

An additional tax applies in the case of taxable capital gains exceeding €50 000. The rate varies from 2% to 6% depending on the amount of the capital gain realised.

Form 2048-IMM-SD contains a table to establish the amount (in practice, this is calculated by the notary).

The tax does not apply to exempt sales or sales of building land.

FYI  

you can see examples of real estate capital gains calculations on the tax administration information leaflet and site imitts.gov.fr .

Formalities by the notary

The notary responsible for the sale carries out the following operations:

  • Representations to the Tax Authority
  • Calculation of taxable capital gain and amount of tax payable
  • Reporting
  • Payment of the tax on the real estate capital gain to the services of the land advertising of the place of the property

Specifying the capital gain on your tax return

You must include the following information on your tax return:

  • Amount of surplus value declared by the notary
  • If necessary, exempt surplus value in case of 1re assignment of a dwelling other than your own main residence

The 2022 2021 income tax return commenced on April 7, 2022.

The deadline varies depending on whether you file your return on paper or online.

Online Declaration
Deadline to file your tax return online

Department

Reporting deadline

1 to 19

Tuesday 24 May 2022 at 23:59

20 to 54 (including 2A and 2B)

Tuesday 31 May 2022 at 23:59

55 to 974/976

Wednesday 8 June 2022 at 11.59pm

Non-residents

Tuesday 24 May 2022 at 23:59

2022 Online 2021 Income Statement

Paper Declaration

The tax return must be filed before Thursday 19 May 2022 at 23:59, including for foreigner residents.

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