Property capital gain France 2026: allowances and surtax

Selling a French property often feels administratively simple: the notaire handles the formalities and the tax is settled at completion. What tends to catch sellers off guard is the actual amount — a forgotten allowance, an undocumented renovation invoice, or a sale timed just weeks before a key exemption threshold.

For 2026, the regime for individual property capital gains remains structurally unchanged. One point is worth stressing at the outset: the 1.4-point CSG increase voted for 2026 does not apply to property capital gains. They remain subject to social levies at the aggregate rate of 17.2%. This is a meaningful distinction, since other categories of investment income do see their tax treatment change this year.

Before allowances, individual property capital gains in France are taxed at 36.2% in total — 19% as income tax and 17.2% as social levies (prélèvements sociaux). The two components follow separate allowance schedules tied to the length of ownership, with full exemption from income tax at 22 years and from social levies at 30 years. A surtax of 2% to 6% applies on top once the taxable gain exceeds 50,000 €.

The gross gain is the difference between the sale price and the adjusted purchase price. The word "adjusted" matters: the purchase price can be increased by certain costs, which mechanically reduces the taxable gain.

Increasing the purchase price#

Two categories of costs can be added to the original purchase price:

• Acquisition costs (notaire fees, registration duties, estate-agent fee at purchase): taken at their actual documented amount, or — if not documented — at a flat 7.5% of the purchase price. In practice, the flat rate often exceeds actual costs for older acquisitions.
• Renovation works: taken at their actual amount supported by builders' invoices, or — if invoices are incomplete and the property has been owned for more than five years — at a flat 15% of the purchase price. Works carried out by the owner themselves are not admissible.

The resulting adjusted purchase price is deducted from the sale price to arrive at the gross gain, which then flows through the allowance schedule.

Worked example: Parisian buy-to-let apartment#

A French resident sells an apartment in June 2026. It was purchased in January 2010 for €280,000. Renovation invoices were not fully retained.

With 16 complete years of ownership (January 2010 to June 2026), the allowance schedules then apply to this €77,000 base.

This is the most important — and most commonly misunderstood — feature of the regime. Income tax and social levies follow different schedules, reaching full exemption at different points.

Ownership duration is counted in complete years from date to date. A sale completed a few months before a key anniversary can therefore cost several thousand euros more than a modestly deferred sale.

Continuing the worked example (16 complete years)#

For 16 complete years of ownership: income-tax allowance = 11 years × 6% = 66%; social-levy allowance = 11 years × 1.65% = 18.15%.

The income-tax base of €26,180 stays below the €50,000 surtax threshold, so no surtax is triggered here. Had renovation invoices been available for an amount exceeding the flat rate, the base would have been lower still.

The aggregate rate is 36.2%, broken down as follows:

• Income tax: 19% — a flat proportional rate, not subject to the progressive income-tax scale. This is a structural advantage of the regime for higher-rate taxpayers.
• Social levies: 17.2% — unchanged in 2026 despite the CSG increase. The 2026 Social Security Financing Act (LFSS 2026) excluded property capital gains from the additional levy.
• Surtax: 2% to 6% — applies only where the taxable gain after allowances exceeds €50,000 (see below).

By comparison, a taxpayer in the 45% marginal bracket paying tax on ordinary rental income faces 45% + 17.2% = 62.2%. The property capital gains regime is structurally more favourable, particularly for properties held over the long term.

The surtax applies when the net taxable gain (after length-of-ownership allowances) exceeds €50,000. It applies to built property and related rights — building land is excluded.

A smoothing mechanism reduces the cliff-edge effect at each bracket entry. Even so, on a net taxable gain of €200,000 the surtax at 4% adds €8,000 to the bill. It is calculated by the notaire and settled on completion day.

In our experience, the surtax is the most frequently overlooked item in pre-sale estimates. It does not affect modest sales, but on valuable properties — or properties with a significant residual gain despite many years of allowances — it can represent 5 to 10% of the total tax charge.

Unconditional exemptions#

• Main residence (résidence principale): the gain is fully exempt, including outbuildings sold at the same time.
• Sales of €15,000 or less: fully exempt, assessed on a per-seller, per-sale basis.
• Retirement pension holders or disability cardholders meeting income thresholds and not subject to the IFI wealth tax in year N−2: full exemption.

Conditional exemptions#

• First sale of a property other than the main residence: exempt if the proceeds are reinvested in purchasing or building a main residence within 24 months, provided the seller has not owned their main residence in the four preceding years.
• Compulsory purchase (expropriation): exempt subject to reinvestment within 12 months.

Progressive exemption by length of ownership#

As set out in the table above, income-tax exemption is complete from 22 years, social-levy exemption from 30 years. Between 22 and 30 years, only social levies remain due, on a base that is already substantially reduced. For sellers approaching either threshold, the timing of a sale is a real financial variable — not an academic one.

Property held through an SCI (société civile immobilière) taxed under income tax#

When the SCI is taxed under income tax (IR), the capital gain follows the individual regime, allocated in proportion to each partner's share. Each partner is taxed individually, and the length of ownership runs from when the partner acquired their shares — not from when the SCI purchased the property. This creates asymmetric situations when partners joined at different times. Our team handles these scenarios as part of broader property tax advisory work.

Furnished rental property (LMNP status)#

A property let furnished under the non-professional regime (LMNP) does not follow the individual capital gains regime on disposal. Instead it falls under professional capital gains rules, where depreciation deducted during the letting period may be recaptured. This is one of the most common misconceptions we encounter. The regime for furnished lettings is materially different from that for unfurnished property or second homes.

Gift before sale#

Where property is donated before the donee sells it, the capital gain is computed from the value declared at the time of the gift. If the gift valuation reflects full market value, the donee's subsequent gain is correspondingly smaller. This "gain purging" strategy requires careful planning around gift duties and the timing of the sale. The SCI taxation guide covers related structural considerations.

A company director planned to sell in 2026 a rental apartment purchased in 2002 — 24 complete years of ownership. Convinced he would pay nothing, he had already factored the full sale price into his cash-flow projections.

After reconstructing the figures:

• After 22 years, income tax (19%) is fully extinguished — correct.
• After 24 complete years, the social-levy allowance stands at: (16 years × 1.65%) + 1.60% + (2 years × 9%) = 26.40% + 1.60% + 18% = 46%.
• Social levies therefore remain due on 54% of the gross gain, at 17.2%.

On a gross gain of €150,000, that is approximately €13,900 in social levies still payable. Waiting until 2030 would have eliminated this charge entirely. The decision to sell in 2026 rather than 2030 carried a precise, quantifiable cost — which the director was able to incorporate into a properly informed decision. The case illustrates why treating the 22-year and 30-year thresholds as two separate planning milestones, not one, is essential.

• The surtax is calculated on the net taxable gain, not on the sale price. It can apply even to long-held properties if the residual gain remains material.
• The two exemption dates are independent. Reaching 22 years clears only income tax, not social levies. Conflating the two is the most financially costly error we observe.
• Without renovation invoices, the 15% flat rate only applies after five years. For properties resold earlier, no works deduction is available without receipts.
• The 2026 CSG increase does not affect property capital gains. The social levy rate stays at 17.2%, preserving the relative attractiveness of this regime.
• LMNP follows entirely different rules. Assuming the individual capital gains regime applies to a furnished rental can lead to a significant underestimate of the tax charge.
• A few months can make a meaningful difference. If the length of ownership is approaching a key threshold (22 or 30 years), a modest deferral of the sale can erase a substantial portion of the remaining tax.

The French individual property capital gains regime is one of the rare tax frameworks where time alone can reduce a liability to zero — but only if the seller knows the two thresholds, the two schedules, and plans accordingly. What we see in practice is that the pre-sale simulation comes too late: sellers arrive having already signed the preliminary agreement (compromis de vente), at which point the sale date is fixed and the calendar cannot be adjusted.

The right approach is to reconstruct the adjusted purchase price early, model the net gain across two or three possible sale dates, check whether the surtax applies, and ask whether a modest delay changes the equation materially. For properties held in an SCI, in joint ownership, or let furnished, the rules diverge and a specific review is essential.

For international buyers, executives on secondment, or US/UK citizens with French property, the interaction between this regime and home-country tax rules adds a further layer — one our English-speaking accountant team deals with regularly.

Updated 2026-06-14. This article is for information only and does not replace personalised advice. For your specific situation, consult a chartered accountant registered with the Ordre des Experts-Comptables.