Are you prepared for France’s capital gains tax rules?

Posted On:03/01/2025 Updated On:09/16/2025
Tax articles
4 min read

Are you aware of the tax implications of selling your French property or investments? Do you know how to minimize your capital gains tax liability and maximize your returns? Unlock the secrets of capital gains tax in France and discover how to navigate the complex rules and exemptions. In this article, we’ll provide you with practical guidance and expert insights to help you make informed decisions and save thousands of euros.

Are you prepared for France’s capital gains tax rules?
Understanding France's capital gains tax

How does France's capital gains tax really work?

Investing in French assets, such as real estate or securities, can be a lucrative opportunity for individuals and companies. However, navigating the complexities of France’s capital gains tax (CGT) can be challenging. Understanding how CGT works is crucial to avoid unexpected tax liabilities and make informed investment decisions.
 
When purchasing an asset expected to appreciate in value, it’s essential to consider the tax implications of selling it in the future. Like most countries, France imposes CGT on asset disposals resulting in monetary gains. However, tax treatment varies depending on the asset type, and the rules can be complex.

Taxation is the price we pay for civilization. – Supreme Court Justice Oliver Wendell Holmes Jr., 1927

Tax treatment of shares and bonds in France

Gains from securities like shares, corporate bonds, and loan stocks are taxed as investment income, not capital gains. The fixed rate is 30%, including tax (12.8%) and social charges (17.2%). This new system represented a significant improvement for higher earners compared to the previous regime.
 
If you’re considering investing in French securities, it’s essential to understand the tax implications and how they may impact your investment decisions. Our team can provide guidance on tax assistance for individuals and corporate to help you navigate the complexities of French tax law and minimize your tax liability.

France’s tax regime for investment income is designed to be competitive with other European countries. – KPMG, France: A Guide to Doing Business, 2022

Selling your primary residence: tax implications

The sale of your primary residence in France is exempt from capital gains tax, provided it’s your main residence at the time of sale. Spending at least 8 months a year in the property supports this exemption. This applies regardless of how you use the proceeds.
 
If you’re planning to sell your primary residence and purchase a new property, you may want to consider the tax implications of the sale and how they may impact your ability to secure financing for your new property. Our team can provide guidance on debt recovery and help you navigate the complexities of French debt law.

The exemption from capital gains tax on the sale of a primary residence is a significant benefit for taxpayers. – French Ministry of Economy and Finance, “Taxation of Real Estate”, 2022

Tax implications of selling other properties in France

The standard CGT rate for selling property is 19% (+ social contributions at 17.2%). However, progressive surcharges ranging from 2% to 6% are added to gains over €50,000, calculated after applying the holding deduction.

Besides the main home exemption, there may be other exemptions. If you receive a state pension and your wealth and income are below a certain level, you may avoid capital gains tax on property. Similarly, if you reinvest the proceeds in your primary residence and have not owned one in the previous four years.

A relief system reduces capital gains tax based on the duration of property ownership. The relief starts from the sixth year of ownership, and after 22 years, no capital gains tax is due at all. For more information on French tax law, please visit the official website of the French Ministry of Economy and Finance.

Social charges on property gains

Gains from the sale of property are subject to an additional 17.2% in social charges (although this is reduced for UK/EU tax residents selling French real estate). Similar to the capital gains tax, a relief system reduces the social charges by 1.65% from the sixth year and by 9% from the 23rd year, with complete exemption after 30 years.

Company setting-up in France

If you’re considering setting up a company in France to manage your property investments, it’s essential to understand the tax implications and how they may impact your business decisions. Our team can provide guidance on company setting-up and help you navigate the complexities of French company law.

Business and commercial issues

If you’re facing business or commercial issues related to your investments, our team can provide guidance on business and commercial issues and help you navigate the complexities of French business law.

Planning for the future

When selling assets, consider future tax implications on investment income and gains. Explore options to minimize tax liability, such as freezing capital gains on shares by setting up a holding company.

Tax planning is essential for individuals and companies to minimize their tax liability and maximize their returns. – Christophe Jal, “Tax Planning for Individuals and Companies”, 2020

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Get in touch with our experts

Our team of My French Lawyer registered lawyers is here to help you with any questions or concerns you may have about capital gains tax in France. We’ll provide you with personalized advice and guidance to navigate the complexities of French tax law, and work closely with you to understand your specific situation and provide tailored solutions to secure your interests. Whether you’re an individual or a company, our lawyers have the expertise and experience to help you achieve your goals. Contact us today to learn more about how we can assist you.

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