Tax changes are good news for property owners in France

The recently announced new system for capital gains tax (CGT) in France after a year of uncertainty has at last put the buyer and seller in a better position.  The new system, where the length of time after which you are relieved of property sales tax has shortened from 30 to 22 years, has begun to apply and also applies retroactively on all properties bought after 17 August 2012.      

The new system, with a large number of exceptions and social “fees” is fairly complicated, which is typical for President Hollande’s socialist government. Even so, it brings foreign investors many benefits.

Original CGT system for 30 years (19 %)

Under 5 years of ownership no relief
5th to 17th year of ownership 2 % relief for each year
18th to 24th year of ownership 4 % relief for each year
25th to 30th year of ownership 8 % relief for each year
Over 30 years of ownership no tax


New CGT system for 22 years (19 %)

Under 6 years of ownership no relief
6th to 21st year of ownership 6 % relief for each year
22nd year of ownership 4 % relief for each year
Over 22 years of ownership no tax


In the same way as the original, the new system is also designed to limit speculation and frequent sales. The new system is much kinder to the typical investor or to those interested in buying a recreational property who intends to keep the property for around 15 years. For instance, if, under the original system, the investor sold his/her property after 15 years, tax relief totalled 22 %, while under the new system, relief would total 22 % - and that is a significant saving. 

The system includes further tax relief in an attempt to restart the French property market – tax on properties bought between 1 September 2013 and 31 August 2014 will be reduced by a further 25 %.

» Property for Sale in France

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