When a non-resident for tax purposes sells a property in France, the capital gain realised is taxed under specific rules, distinct from those applicable to French tax residents. This guide explains what constitutes a capital gain, how it is calculated, which rates apply, what deductions and exemptions are available, and how the tax treaty concluded with your country of residence affects the final outcome.

A capital gain in France corresponds to the difference between the sale price of a property and its acquisition price, adjusted for certain costs and works. For a non-resident, this gain is taxed at source – meaning it is withheld at the time of signing the deed of sale, by the notary, on behalf of the French tax authorities.

This withholding mechanism explains why the appointment of an accredited tax representative is mandatory: it is their role to calculate the tax, certify its amount and guarantee its payment to the French Treasury.

Non-resident capital gains are subject to two distinct levies. The first is capital gains tax at the flat rate of 19%. The second encompasses social levies, at an overall rate of 17.2%, reduced to 7.5% (solidarity levy) for persons affiliated with a social security scheme of a European Economic Area state or Switzerland.

For a seller residing in the United States, the United Kingdom, the UAE (Dubai), Canada or Australia, the overall reference tax burden is therefore 19% + 17.2%, i.e. 36.2%, before application of duration-based allowances.

In addition to these two levies, a surcharge on high capital gains may apply: a progressive scale triggered above 50,000 euros of net taxable gain, which can raise the overall rate to 42.2%.

The calculation starts from the sale price, from which the acquisition price – increased by certain costs – is deducted. Acquisition costs are, at the seller’s choice, either taken at their actual amount with supporting documents, or calculated as a flat 7.5% of the purchase price. Improvement works may also be deducted, either based on actual invoices if carried out by a company and not already deducted for tax purposes, or as a flat 15% of the purchase price when the property has been held for more than five years.

The gross gain thus obtained is then reduced by the duration-based allowances. For capital gains tax, full exemption is reached after twenty-two years of ownership. For social levies, full exemption is only reached after thirty years. This dual timeline explains why optimising through length of ownership remains a key lever, however imperfect.

For a detailed calculation with worked examples, see our full guide to capital gains calculation for non-residents.

Progressive allowances apply from the sixth year of ownership onwards:

• For capital gains tax (19%): 6% per year from year 6 to year 21, then 4% in year 22. Full exemption at 22 years.
• For social levies (17.2%): 1.65% per year from year 6 to year 21, 1.60% in year 22, then 9% per year from year 23 to year 30. Full exemption at 30 years.

In practice, a property held for 25 years is fully exempt from capital gains tax but remains partially subject to social levies.

Beyond duration allowances, several specific exemptions may apply to non-residents.

First property sale exemption

A non-resident who has never owned their main home in France may, under certain conditions, benefit from an exemption on the first sale of a property located in France, capped at 150,000 euros of net taxable gain. The sale must take place no later than 31 December of the tenth year following the transfer of tax residence abroad, and the property must have been freely available to the seller for at least one year before the sale.

Exemption for property held more than thirty years

As noted above, the gain is fully exempt – both capital gains tax and social levies – after thirty years of ownership.

Sale below 15,000 euros

Sales below 15,000 euros are exempt. A marginal case for real property, but which may apply to disposals of SCI shares of very low unit value.

France has signed bilateral tax treaties with the vast majority of countries. For capital gains on real property, these treaties generally recognise the right to tax as belonging to the state where the property is located – in this case, France. In practice, the gain remains taxable in France under the rules described above.

However, your country of residence may also wish to tax the same gain under its own tax rules. This is where the tax treaty plays its role: it provides a mechanism to eliminate double taxation, either through exemption or through a tax credit, depending on the treaty. The terms vary considerably from one country to another – which is why it is worth checking the France-USA, France-UK, France-UAE, France-Switzerland, France-Canada or France-Australia treaty as it applies to your situation.

Optimising your capital gain position relies on three levers: careful verification of deductible costs and works, close examination of potentially applicable exemptions, and precise reading of the tax treaty linking France to your country of residence. ACCREDITAX coordinates these three dimensions with your notary and the accredited tax representative retained, to ensure nothing is overlooked.