The sale of a principal residence in France is exempt from capital gains tax (CGT) and social charges on any resulting capital gains – but conditions are attached. We explain and give five other situations where the exemption applies:
1. Selling your principal residence: This applies even if it has only been your principal residence for a short time. In such a case, officials look at factors such as your use of utilities there and whether or not another property was available to you.
You can also benefit if you sell soon after moving within a “reasonable time,” usually a year. There may also be some flexibility, for example. if the real estate market was down, causing difficulty in selling the property.
Where a property is sold due to separation or divorce, it may be sold as having been the principal residence of both parties during the relationship, even if one has moved away, provided it is sold within a “reasonable” time after it is put up for sale. sale.
If you own several properties, you have no choice of your “main” residence: it is the one where you usually live, most of the time, and declared as such for the housing tax.
If you sell your old main residence after moving abroad to an EU country or to a country that has signed an anti-fraud agreement with France, such as the UK, you can still benefit from it if you sell before the end of the year following the move. .
A separate rule provides an exemption until the end of the fifth year following the year of the move for capital gains of up to €150,000 on the sale of French property by a former resident who moved. settled abroad. However, you must be an EU or EEA citizen to benefit.
Read more: What are the tax consequences of selling a second home in France?
2. The former principal residence of an elderly person who now lives in a nursing home. The sale must take place within two years of the departure of the person and the exemption is conditional on his resources. In 2022, this was a reference tax income for 2020 of less than €26,149 per share of family quotient (a single person has one share, or one and a half if disabled registered). The accommodation must not have been rented or used by a person other than a member of the tax household of the person.
3. Properties generally owned by state pensioners and registered disabled people who are below certain “modest” income limits and not subject to wealth tax.
4. A garage sold at the same time as the principal residence if it is less than one kilometer from it.
5. Sale of a secondary residence or investment property if you have not owned a principal residence in the last four years (including partial ownership of the usufruct or bare ownership type). The money must be used within two years to purchase one.
6. After 22 years of owning a second home there is no CGT. There are no social charges due after 30 years.
Related Articles:
Capital release: a start-up offers leads to French owners
Do I have to declare a capital gain in France on the sale of a home abroad?
French tax declaration: Are there allowances on capital gains on shares?
