Capital gains on property: What exemptions are available to non-residents?

You are not resident for tax purposes in France and you wish to sell a property located in France. When are you exempt from tax on capital gains?

Former main residence

You will be fully exempt from tax on capital gains (income tax and social security contributions) if:

1. The property was your main residence on the date on which you ceased to be tax resident in France
2. You own the property directly or you own it through a partnership
3. Your current country of tax residence has entered into a tax information exchange agreement with France *
4. The transfer is completed by 31 December of the year following the year in which you ceased to be tax resident in France
5. The property has not been rented or loaned (made available free of charge) since you left France
6. You have not already benefited from the €150,000 capital gains exemption on the sale of a property after you left France (see below).

A property that was not a main residence

If the property was not your main residence at the time you left France, you will be exempt from tax on the net capital gain (after obtaining relief for the holding period) of up to €150,000 if:

1. The sale completes on or before 31 December of the 10th year following the year in which you ceased to be tax resident in France OR without any time limit, if you have had freedom to dispose of the property as you wish since 1 January of the year preceding the year of the sale
2. You are a national of an EEA state (an EU state, Norway, Iceland or Liechtenstein)
3. You were tax resident in France continuously for at least two years at any time prior to the sale: for the purposes of this condition, any years in which you were, as a minor child, attached to the tax household of your parents who were resident for tax purposes in France may be counted.
4. You own the property directly (not through a company).
5. You have not already benefited from the capital gains exemption on the sale of your former main residence.

The exemption is capped at one residence per taxpayer and €150,000 of net taxable capital gain (i.e. €300,000 for a property held equally by a couple) from 1 January 2014 onwards.

Example: Mr and Mrs B have now lived in Norway for 8 years after being resident in France for tax purposes. They sell for €1,500,000 a property they had acquired in equal shares 10 years previously for €900,000, resulting in a capital gain of €600,000.

Income tax: Relief: (6% * 5 years) = 30%, i.e. a gain subject to income tax of 600,000 * 70% = €420,000.

After deducting the exemption of €150,000 *2, the taxable gain for income tax purposes (19%) is €120,000 for the couple, i.e. €22,800.

Social security contributions: Relief: (1.65% * 5 years) = 8.25%, i.e. a gain subject to income tax of 600,000 * 91.75% = €550,500.

After deducting the exemption of €150,000 *2, the taxable gain for social security contribution purposes (17.2%) is €250,500 for the couple, i.e. €43,086.

Tax on large capital gains from property calculated on the tax base (€120,000) i.e. €60,000 per spouse:

2% * 60,000 = €1,200.

* The list of States that have not entered into tax information exchange agreements and mutual assistance agreements on tax collection with France is subject to change. By way of information, this list included the following 16 countries at the end of 2023:

American Samoa, Anguilla, Antigua and Barbuda, Bahamas, Belize, Fiji, Guam, Palau, Panama, Russia, Samoa, Seychelles, Trinidad and Tobago, Turks and Caicos Islands, U.S. Virgin Islands and Vanuatu.

Article 150 U of the French General Tax Code,

Article 244 bis A of the French General Tax Code,

Article 150 VC of the French General Tax Code,

Article 1609 nonies G of the French General Tax Code.