Gross capital gains are equal to the difference between the sale price and the purchase price of a property, or its declared value if it has been received by gift or inheritance.
To determine the net capital gain, the taxable amount must be determined by taking into account the adjusted purchase and sale prices.
The adjusted purchase price corresponds to the actual price as stipulated in the deed, plus the following costs/expenses:
NB: If you have carried out the work yourself, or if it was done as part of a rental expense, it cannot be deducted, as it is considered to be maintenance and repair work.
The adjusted selling price is the price paid by the seller as stipulated in the deed, plus the compulsory costs of the sale, such as surveys and agency fees.
It is this difference between the corrected sale price and the corrected purchase price that is used to calculate the capital gains tax rate.
Capital gains tax is the sum of 2 separate taxes:
The overall rate of tax is therefore 36.2%, to be applied to the amount of the net capital gain, i.e. after reduction of the allowance for holding period.
The allowance rates for these 2 taxes differ:
| Period of ownership | Rate of allowance per year for calculating income tax | Allowance rate per year for calculating social security contributions |
|---|---|---|
| Under 6 years | 0% | 0% |
| Between years 6 and 21 | 6% per year | 1.65% per year |
| Years 21 and 22 | 4% per year | 1.6% per year |
| From the 22nd year | Total exemption | 9% per year |
| From the 30th year | Total exemption | Total exemption |
For income tax, the tax is nil from the 22nd year the property is held. CSG-CRDS tax is exempt from the 30th year of ownership.
If the net capital gain exceeds €50,000, an additional tax is applied per tranche of the net capital gain, according to a progressive scale of 2% for amounts between €50,001 and €100,000, and 6% for amounts of €250,001 and above.
This tax applies to both individual sellers and SCIs.
The capital gains tax is calculated by the notary when the property is sold and deducted from the amount due to the vendor.
You can also calculate your capital gains using this online simulator on the Notaires de France website.
Stone & Wood offers you personalised support to help you find the solutions best suited to your situation.
Thanks to our network of trusted partners, we can direct you to the right specialists for your project: notaries, chartered accountants and asset managers.
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