Selling property : tax arrangements and rate

Calculating the tax

You are a non-resident and make capital gains which are taxable in France. The tax is calculated according to the same conditions applying to residents of France with an allowance based on the duration of ownership being factored in.

To calculate the amount subject to income tax, this allowance is:

  • 6% for each year of ownership subsequent to the fifth year and up to the twenty-first year ;

  • 4% subsequent to the twenty-second year of ownership

Overall, exemption from income tax is granted after twenty-two years' ownership.

For social levies, the allowance based on the duration of ownership is :

  • 1.65% for each year of ownership subsequent to the fifth year up to the twenty-first

  • 1.60% for the twenty-second year of ownership

  • 9% for each year subsequent to the twenty-second

Exemption from social levies is granted after thirty years' ownership.

Tax rate

You are a non-resident and you make direct or indirect capital gains:

  • during the sale or transfer for valuable consideration of property located in France 

  • or during the sale or transfer for valuable consideration of shares in a company whose assets are essentially properties located in France.

Your capital gains will be subject to a 19% levy.

Social levies

If you are a resident of a country outside the EU, EEA, the United Kingdom or Switzerland, social levies will apply at the overall rate of 17.2%.

If you have made capital gains on a property sale since 1 January 2019 and you are affiliated to a compulsory social security system outside France but in an EEA country (European Union, Iceland, Norway, Liechtenstein) or Switzerland, you are exempt from the general social security contribution (CSG) and the social security debt repayment contribution (CRDS). Although the United Kingdom left the European Union on January 1, 2021, British residents continue to benefit from this exemption. A 7.5% solidarity levy will still apply.

Exemption

Two exemptions are possible, subject to conditions:

  •  A total exemption in the event of the sale of your main residence in France,
  • or an exemption of up to €150,000.

To find out more, see the page: Selling property: are there similar exemptions (main residence, etc.) for non-residents and residents?.

Declarations

For the sale of property or property rights, form no. 2048-IMM-SD must be filled out.

For the sale of the shares of companies investing predominantly in property, form no. 2048-M-SD must be filled out.

Please note: These forms can be downloaded from this website (using the search engine).

Appointment of a tax representative

Dispensation

Three situations allow for automatic dispensation from appointing a tax representative:

  • When the seller lives, is based or is incorporated in an EU Member State or in another country party to the Agreement on the European Economic Area (EEA) which has signed a mutual administrative assistance agreement with France (Iceland and Norway)

  • For sales of €150,000 or less This upper limit is assessed for each seller.

  • For sales allowing for capital gains exemption both in terms of income tax and social levies owing to the duration of ownership of the property (22 years for income tax and 30 years for social levies)

Capacity of tax representative

The following may be tax representatives:

  • A company or organisation already permanently accredited by the tax authorities

  • Banks and credit institutions carrying on their business activity in France

  • The buyer of the property if he is resident of France for tax purposes

  • Or any other person who is resident of France for tax purposes, except notaries and lawyers. In the latter category, the representative must be accredited by the tax authorities.

Departments tasked with processing applications for the appointment of an accredited representative

Accreditation may be applied for from the département or regional public finances directorate having jurisdiction over the location of the property or the registered office of the company investing predominantly in property (sale of shares).

Particular cases :

  • When the property is located in Paris, accreditation must be applied for from the Ile-de-France Regional Public Finances Directorate (Direction régionale des finances publiques d'Ile-de-France - Missions foncières - 9, place Saint-Sulpice - 75292 Paris Cedex 06, France / Phone number : +33 1-53-27-46-45).

  • When the registered office of the company investing predominantly in property (sale of shares, stock or rights) is located abroad, accreditation must be applied for from the DINR (Direction des impôts des non-résidents - 10, rue du Centre 93 465 Noisy-le-Grand Cedex, France

Tax payment

When the sale is concluded, the notary pays the tax owed (income tax and social levies).

If other income liable for income tax is received in France, the amount of capital gains must be declared in form no. 2042 C (box 3VZ) so that it may be included in calculation of the base taxable income.

 

UPDATED DINR PART – JULY 5, 2022

 

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