Capital gains tax in France

What is the French capital gains tax system?

France operates two separate capital gains tax frameworks that must not be conflated. Securities and movable-property gains (plus-values mobilieres) are subject to the Prelevement Forfaitaire Unique (PFU), a flat tax introduced on 1 January 2018. Real-estate gains (plus-values immobilieres) are taxed at a fixed 19% income tax rate plus social levies, with a progressive taper relief that fully eliminates the tax after 30 years of ownership. The sale of a principal residence is exempt from both income tax and social levies regardless of how long the property has been held. Both frameworks are administered by the Direction Generale des Finances Publiques (DGFiP) and reported through the annual income tax declaration filed at impots.gouv.fr [1].

For the France country overview covering income tax brackets, residency rules, and the broader French tax stack, see the dedicated country page.

How does the PFU flat tax apply to securities gains in 2026?

Capital gains on shares, bonds, mutual-fund units, and other movable-property assets realized by French tax residents are subject to the PFU by default. The 2026 PFU rate is 31.4%, composed of 12.8% income tax and 18.6% social levies. The social-levy component rose from 17.2% to 18.6% when the 2026 Social Security Financing Law (Loi de financement de la securite sociale pour 2026, adopted 16 December 2025) increased the CSG rate on investment income from 9.2% to 10.6%. The total social-levy package is now: CSG 10.6%, CRDS 0.5%, solidarity levy 7.5% = 18.6% [2].

Taxpayers may elect the progressive income tax scale instead of the PFU by checking box 2OP on their annual tax return. This election covers all capital income for the year (dividends, interest, and securities gains together -- no partial election is permitted). The progressive option can benefit filers whose marginal income tax rate falls below 12.8%, because 6.8 percentage points of CSG become deductible under the progressive route. For shares acquired before 1 January 2018 and taxed under the progressive scale, holding-period allowances remain available: 50% for shares held 2-8 years, 65% for shares held more than 8 years, and an enhanced 85% allowance for qualifying startup shareholdings. No holding-period allowance applies to post-2018 acquisitions under the PFU. From the 2026 tax year, the PFU/progressive election is reversible via an amended return -- a change from the previously irrevocable annual choice [3].

How are real-estate capital gains taxed, and what is the taper relief?

Real-estate gains are taxed at a flat 19% income tax rate. Social levies on real-estate gains for French tax residents remain at 17.2% (the 2026 CSG increase explicitly excluded real-estate capital gains from its scope). The combined gross rate is therefore 36.2% before any taper relief is applied [1][4].

Taper relief (abattement pour duree de detention) runs on two separate clocks:

A property held exactly 10 years carries 5 years of relief (years 6-10): income tax relief of 30%, social-levy relief of 8.25%. A property held 22 years is fully exempt from income tax but still carries approximately 28% social-levy relief, leaving around 72% of the gain subject to 17.2% social levies. Full exemption on both tracks requires 30 years of ownership. The notary handling the sale collects and remits the tax at completion -- sellers do not file a separate return in standard cases [1].

What surtax applies to large real-estate gains?

Where the net taxable real-estate gain (after taper relief) exceeds EUR 50,000, a progressive surtax applies in addition to the 19% income tax and 17.2% social levies. The surtax is computed on the total gain, with smoothing formulas at each bracket boundary to prevent cliff effects:

Inline SVG follows the GFM table above

The surtax applies only to the income tax computation and is not levied as part of the social-levy calculation. A gain of EUR 150,000 (net taxable after taper relief) therefore carries: 19% income tax (EUR 28,500) + 3% surtax (EUR 4,500) + 17.2% social levies (EUR 25,800) = EUR 58,800 total, an effective rate of approximately 39.2%. The surtax brackets and smoothing formulas are codified in Article 1609 nonies G of the Code general des impots and in the DGFiP's Bulletin Officiel des Finances Publiques (BOFIP reference BOI-RFPI-TPVIE-20) [5].

When is a capital gain fully exempt?

The main-home (residence principale) exemption under Article 150 U II 1 of the Code general des impots provides an automatic full exemption on any capital gain arising from the sale of the seller's principal residence. No minimum holding period is required. The property must be the seller's actual and habitual dwelling at the date of the sale. Where a seller has recently vacated the property -- for example to move into a care facility or following a job relocation -- the exemption may still apply if the sale is completed within a reasonable delay (generally interpreted as 12 months; longer periods may be accepted for care-home moves). A second property or rental property does not qualify, regardless of how long it has been owned, unless one of the limited statutory exemptions applies (for example, a first-time sale of a secondary residence where the proceeds are reinvested in a new principal residence) [1][4].

Consult a qualified French tax professional (expert-comptable or conseil fiscal) to assess your specific circumstances before any disposal. The rules described on this page reflect published DGFiP guidance and are not a substitute for professional counsel.

For cross-border investors, see also the France country overview which covers tax residency, treaty entitlements, and the wider French tax framework.