When a non-resident sells property in France, two countries may seek to tax the same capital gain: France, where the property is located, and the seller’s country of residence. Bilateral tax treaties prevent this double taxation. This page explains how they apply to property capital gains and reviews the six treaties relevant to the expatriates ACCREDITAX serves.

For property capital gains, almost all tax treaties follow the OECD model, under which the primary right to tax belongs to the country where the property is located. France therefore taxes first, at source, when the deed is signed before the notary. This point is not negotiable.

The treaty then provides for the elimination of double taxation in the country of residence, through one of two possible mechanisms: exemption (the country of residence waives its right to tax the gain) or tax credit (the country of residence taxes the gain under its own rules but grants a credit for the tax already paid in France). The mechanism used varies from one treaty to another.

Mechanism: a tax credit on the US side (foreign tax credit, Form 1116), capped at the US tax due on the same gain. France taxes the full gain at source, then the United States recalculates it under its own rules and offsets the French tax up to the amount of its own tax. An excess that cannot be offset may remain, particularly if the French rate exceeds the effective US marginal rate.

Mechanism: a tax credit on the UK side. UK Capital Gains Tax (CGT) applies under UK rules, with the French tax already paid offset against it. The CGT rate (10%, 18% or 24% depending on the taxpayer’s profile and the type of asset since 2024) is often lower than the overall French rate, which means the credit can be used in full. Since Brexit, UK residence no longer gives access to the reduced 7.5% rate on the French side.

Mechanism: in practice there is no double taxation to eliminate, since the United Arab Emirates levies no personal income tax or capital gains tax. The treaty confirms France’s primary right to tax capital gains on property located in France and organises administrative cooperation. For a UAE resident, the French tax is the only charge.

Mechanism: exemption with an effective rate rule on the Swiss side. The gain taxed in France is in principle exempt from Swiss federal tax, but it may be taken into account in determining the tax rate applicable to the taxpayer’s other income (effective rate). Cantonal treatment varies. Swiss residence gives access, subject to affiliation to the AVS (Swiss old-age insurance), to the reduced 7.5% rate on the French side.

Mechanism: a federal tax credit on the Canadian side (foreign tax credit), capped at the Canadian tax due on half of the gain (50% taxable at the marginal rate). Any excess French tax that cannot be offset remains payable by the taxpayer. In Quebec, the federal credit is supplemented by a provincial credit under specific rules.

Mechanism: a tax credit on the Australian side (foreign income tax offset, FITO). Australia includes the gain in taxable income at the marginal rate, applying the 50% CGT discount for assets held for more than one year. The credit for French tax is capped at the Australian tax due on this reduced base, which may limit what can be recovered.

• France always taxes first, and no treaty removes French tax at source.
• The foreign tax credit is never automatic. It must be claimed in the tax return of the country of residence, on the basis of the French tax certificate.
• Excess French tax that cannot be offset may remain, depending on the country. Working out the calculation on both sides in advance lets you measure this gap before the sale.