French Second Homes: Reduction in Capital Gains Tax Exemption Period
French MPs have approved a bill aimed at enhancing the housing market's flexibility in high-demand areas by shortening the ownership period required for capital gains tax exemption on second homes.
Details of the Amendment
On November 3, the Assemblée nationale adopted an amendment to the 2026 budget’s projet de loi de finances (PLF). If enacted, this will reduce the time owners must hold a second home to qualify for exemption from the impôt sur la plus-value de cession by five years.
Capital Gains Tax Rules in France
Main residences in France are exempt from capital gains tax and social charges regardless of how long they are owned, although amendments are being considered for certain cases.
Second homes, however, face different rules:
- If sold within 22 years of purchase, the capital gains tax applies.
- After 22 years, owners become fully exempt from capital gains tax but must pay social charges if the sale occurs between the 23rd and 30th years.
- Sales made after 30 years are entirely exempt from both capital gains tax and social charges.
The tax and social charges reduce gradually over time until full exemption at 30 years.
"After 22 years, owners are 100% exempt from capital gains tax, but must still pay social charges if the property is sold during the 23rd to 30th year of ownership. If it is sold after 30 years, owners are exempt from 100% of capital gains tax and social charges."
Additional Resources
For a detailed breakdown of the percentages and an example calculation method, refer to specialized guides on capital gains taxation in France.
Author’s summary: French lawmakers propose reducing the second home capital gains tax exemption period by five years to stimulate housing market activity in sought-after regions.