Capital Gains Tax in France

Capital Gains Tax in France or  impôt sur les plus-values as it is known is a tax payable on the sale of real estate property, land, buildings, shares or other personal property. As with other types of tax, french capital gains tax can be subject to certain exemptions, deductions and allowances that maybe available but navigating this area and knowing what the best options are for you and your financial situation can be confusing. Depending on the type of asset (be it moveable or immovable assets), the rules, rates and allowances will differ for the gains made.

What is Capital Gains Tax in France?

Capital gains tax in France applies to profits from the sale of assets such as real estate, shares and other investments. For gains on most directly held shares and securities realised in 2026, the default flat-tax rate is 31.4%, comprising 12.8% income tax and 18.6% social charges. Direct property gains are generally taxed at 19% plus 17.2% social charges, subject to exemptions and ownership-period allowances.

An additional tax of between 2% and 6% may apply to taxable property gains above €50,000, although it does not apply to building land. Exemptions and reliefs may reduce the taxable gain, and the treatment of shares and other financial assets follows a different set of rules.

Capital Gains Tax Rates in France 2026

• Shares and financial investments: generally 31.4% under the default flat tax in 2026, comprising 12.8% income tax and 18.6% social charges
• Direct property: generally 19% income tax plus 17.2% social charges
• Property ownership allowances begin after the fifth year
• Full exemption from property capital gains income tax after 22 years of ownership
• Full exemption from social charges on property gains after 30 years of ownership

Let us take a closer look at the rules and rates surrounding some different types of assets and how capital gains tax applies to them.

Capital Gains Tax on Property

Capital Gains Tax (CGT) on property in France applies when selling real estate property. However, there are key exemptions and allowances:

1. Principal residence exemption – A property that is the seller’s genuine, habitual and effective principal residence is generally exempt from capital gains tax and social charges. The exemption may sometimes continue after the seller moves out, provided the property was occupied until it was put on the market, remains unoccupied and is sold within a normal period.
2. Former second homes – Merely declaring a former second home as a principal residence, or occupying it temporarily before a sale, does not guarantee exemption. The property must genuinely be the seller’s habitual and effective principal residence, assessed on the facts.
3. Tax on non-primary residences – The standard rates are generally 19% income tax plus 17.2% social charges. A seller who is covered by a qualifying compulsory health-insurance system in the EEA, the United Kingdom or Switzerland, and who is not a charge on a compulsory French social-security system, may be exempt from CSG and CRDS. The 7.5% solidarity levy generally remains, producing a basic combined rate of 26.5% before ownership allowances and any additional tax on high property gains.
4. UK-France tax treaty – A gain on UK property sold by a French resident may be taxed in the United Kingdom because the property is situated there. The gain must also be considered in France, with double taxation normally relieved by the treaty credit.
5. Ownership-period exemptions – The taxable gain reduces gradually over time. Property gains are fully exempt from income tax after 22 years and from social charges after 30 years.
   The relief builds up gradually rather than becoming available only at the final exemption dates:
   

   Years owned	Income tax relief	Social charges relief
   0-5	None	None
   6-21 (per complete year after year 5)	6% per year	1.65% per year
   22nd year	4% in the 22nd year, reaching 100%	1.60% in the 22nd year
   23-30 (per year)	Fully exempt	9% per year, reaching 100% after 30 years

6. Allowable costs – Certain acquisition, construction and improvement costs may increase the property’s allowable cost, either at their actual qualifying amount or through a statutory fixed allowance where the conditions are met.

Capital Gains Tax for Non-Residents Selling French Property

France can tax gains on French property even when the seller is not resident in France. A seller who is tax resident outside the EU or a qualifying EEA country, including a UK tax resident, will generally need to appoint an accredited French fiscal representative. A representative is not normally required where the sale price does not exceed €150,000, as assessed under the applicable seller rules, or where the gain is fully exempt from both income tax and social charges due to the ownership period.

Please note that Kentingtons offers advice on capital gains tax, only as part of overall comprehensive financial planning and not in isolation.

French Capital Gains Tax on Shares / Managed Portfolios / Funds etc.

Gains on most directly held shares, equities and other securities realised in 2026 are subject by default to a flat tax of 31.4%, comprising 12.8% income tax and 18.6% social charges. A household may instead make a global annual election for the progressive income-tax scale, which can be advantageous in some circumstances but applies more widely than a single transaction.

France does not provide a general annual tax-free capital gains allowance for directly held shares. The availability of losses, historical holding-period relief, and the taxpayer’s broader income position can therefore affect the result.

UK ISAs do not retain their UK tax exemption in France, so the French treatment is based on the underlying income and gains. French wrappers work differently. A PEA can provide income-tax exemption for gains after five years, although social charges remain relevant. Under an assurance vie contract, income tax generally arises when money is withdrawn and applies to the gain element of that withdrawal. Social charges may be collected when returns are credited to the contract, on withdrawal or when the contract ends.

The progressive-rate option should be considered across the household’s relevant investment income and gains for the year, because it is a global election rather than a choice made separately for each disposal. Losses, historical reliefs, and deductible CSG may affect the comparison, so the 31.4% default rate should not be automatically assumed to be the lowest result.

Shares acquired or subscribed for before 1 January 2018 may still qualify for holding-period relief where the household elects for the progressive income-tax scale. The standard relief is 50% for shares held for at least two but less than eight years and 65% after eight years. Certain qualifying young SME shares may receive enhanced relief of 50%, 65% or 85%, depending on the holding period and the detailed conditions. These allowances reduce the gain subject to income tax, but they do not reduce the amount subject to social charges or included in reference taxable income.

Tax Efficient Wrappers PEA and Assurance Vie

A PEA and an assurance vie contract are both French tax-planning structures, but their rules are different. After a PEA has been open for five years, gains withdrawn are generally exempt from income tax, although social charges remain relevant. Assurance vie does not require an eight-year lock-in: withdrawals can be made earlier. After eight years, withdrawals can benefit from an annual income-tax allowance of €4,600 for a single person or €9,200 for a married or PACS couple, taxed jointly. The allowance applies across the household’s qualifying contracts; it is not available separately for each contract. Potentially lower income tax rates may also apply, depending on the premiums and circumstances.

How to Avoid Paying Capital Gains Tax in France

In certain situations, it may be possible to reduce the amount of capital gains tax that you need to pay, or even avoid paying altogether.

For example, suppose the real estate property you are selling in France is your main place of residence. In that case, you do not have to pay capital gains or social charges against its sale. Also, if the property sale is under €15,000, then again, no capital gains tax is payable.

Another situation where you are not liable to pay capital gains tax, would be when you have owned a second home for more than 22 years. You do not need to pay social charges for properties that have been owned for more than 30 years.

The exemptions are fact-specific, and the notaire normally calculates and pays French property capital gains tax on completion. As always, it is important to consult with a specialist international tax advisor when considering such matters to ensure you remain compliant with the latest financial rules and regulations.

What are French social charges?

Social charges have been referenced several times throughout this guide, but what are social charges and how do they apply to you?

French social charges are essentially just another form of taxation. Indeed, the double tax treaty between France and the United Kingdom begins by defining social charges as “tax”.

France has a comprehensive social security system. That system is funded by social security contributions as well as social charges, which are a percentage of people’s taxable income. However, other forms of income such as that from pensions, rental income, interest from savings, investments or capital gains tax are also liable to social charges.

These social charges are taxed at different rates depending on the type of income source that it relates to. As of 2022, the tax rates are currently set to:

• CSG (Contribution sociale généralisée) – 9.2%/0%
• CRDS (Contribution pour le remboursement de la dette sociale) – 0.5%/0%
• Prélèvement de Solidarité – 7.5%

How much social charges you are liable to pay will depend on your own particular situation, including whether you are a resident in France or not, as you may be liable to pay a flat rate of 17.2% or a minimum tax rate of 7.5%.

Again, it is advisable to consult with a specialist tax and financial expert for advice to unsure if you are paying the right amount of social charges and tax based on your personal situation.

How Can Kentingtons Help?

The good news is that, as a leading tax and financial consultant in France, Kentingtons’ is able to provide a service to aid our French resident clients in making use of suitable investment structures and only recommend those that are completely exempt from the payment of Capital Gains Tax (clearly the smart option is not to bother with this tax at all, if you do not legally need to).

If you would like to know more about how you can simply eliminate french Capital Gains Tax from your savings, please do get in touch.

The information on this page is intended only as an introduction only and is not designed to offer solutions or advice. Kentingtons can accept no responsibility whatsoever for losses incurred by acting on the information on this page.