Capital gains tax relief proposed on second-home sales in France

On 16 October, the National Assembly supported the amendment to the 2027 budget bill. Approval at this stage does not make it a law that can already be applied.

Before a transaction, recheck the final text, official publication and application date. For now, you can compare scenarios and prepare contract terms while retaining the calculation under current rules.

The allowance reduces the taxable amount, not the tax rate or the apartment’s price. For example, a 40% allowance leaves 60% of the gain subject to income tax. The proposal increases the allowance by 8 percentage points for each complete year from the sixth through the sixteenth, then by another 12 points for the seventeenth.

The condition links two different people: the seller reduces their tax, while the buyer signs an undertaking in the notarial deed to use the property as a main residence or let it for that purpose. The buyer’s consent therefore has its own value and consequences.

At five complete years of ownership, the allowance is zero. “5–17+ years” includes that lower boundary and continuation of the full allowance after 17 years; it does not mean exemption in the fifth year.

The wording concerns the property’s condition and use before the sale. It does not mean that the seller need own it for only one year, nor does it exclude any earlier history of main-residence use.

Ask the seller and notary to confirm actual use, the dates of any changes and the category referred to in Article 1407 I of the Tax Code. Declarations, records of use, agreements and other documents must be considered together; the amendment provides no universal exhaustive checklist.

Do not automatically include an unfurnished property, a recent change of use or an incomplete history in the calculation. The seller’s holding period requires a separate check: even an eligible property has a zero holding-period allowance after five complete years.

If you need the apartment free for particular weeks each year, tourist letting during the remaining time cannot be treated as meeting the main-residence condition.

Before agreeing the price, decide your priority: retain holiday use or accept sustained main-residence use. In the first case, discuss a purchase without this relief or another property; in the second, check the deadlines, agreement and rental feasibility.

A promise to designate the property as a “main residence” only on paper does not resolve a conflict with its actual calendar of use.

It must actually be the tenant’s main home. The agreement’s title alone does not prove compliance; a tourist or holiday let does not become a main residence through an added clause.

Agree with the notary on a suitable tenancy and evidence of use: who occupies the apartment, from when and on what basis. The amendment provides neither a universal separate document list nor a special number of occupation days covering every situation.

This route may make a purchase possible while you continue living abroad, but restricts your free access to the apartment. The tenancy must be considered separately from the tax obligation period: the property may remain occupied after that period ends.

Illustrative example: for a purchase on 15 June 2027, the tenancy must start no later than 15 December 2027, and main-residence use must continue until 1 January 2030.

For a purchase on 15 December 2027, the end date for main-residence use is also 1 January 2030, while the tenancy must start within six months of the December deed. “Exactly three years after purchase” is therefore incorrect.

Record both calendar dates in the draft deed. If renovation is planned, allow realistic time for the work and handover to the tenant before accepting the undertaking.

Personal occupation must still meet the main-residence condition. Applying the tenancy’s six-month rule to this route without a separate basis could create a false impression of an authorised grace period.

Before giving the undertaking in the deed, tell the notary when the property will be ready, when you can lawfully relocate and what happens if those dates differ. If timely personal occupation cannot be confirmed, consider a compatible rental route or a transaction without this regime.

The absence of a specific deadline does not justify saying that the buyer must move in on the signing date either: the text reviewed does not set that separate deadline.

Start by checking the property itself: fitness for occupation, the energy performance assessment (DPE), necessary work and restrictions in the agreement or building. These are separate existing rental rules, not new requirements introduced by the proposed capital gains tax relief on property sales (amendment I-3484) in France.

For mainland France, Service Public states that agreements signed, renewed or tacitly renewed in 2025–2027 may concern energy classes A–F; from 2028, A–E. A rental plan extending across that date must be checked against the energy class and required work.

If the property is occupied, establish the present occupant’s legal basis and rights. Plans to obtain vacant possession or alter the apartment must rely on lawful deadlines and documents, not the desired date. The six-month rental deadline does not override the existing occupant’s rights.

If renovation or a legal restriction makes a timely start unrealistic, reconsider the transaction’s tax regime before signing, rather than assume a future extension is already available.

If the undertaking has already been given under a rule in force, provide the professionals with the deed, handover and planned tenancy-start dates, and documents on work, occupants’ rights and the tenant search. They must establish whether your specific undertaking has been breached, what consequences and procedures the final rule provides, and the available next steps. Do not assume that a late tenancy start automatically cures the earlier breach: the amendment offers no such guarantee.

Dates and reasons matter: when the previous agreement ended, when the occupant left, how the owner maintained the property’s intended use and when the new tenancy is due to take effect.

Keep records of the previous tenancy’s end and the search for a new tenant, then seek an assessment under the final rule and actual circumstances. The amendment sets out neither a special assessment procedure nor automatic relief for actively seeking a tenant.

Using the gap for tourist letting or your own holidays is a separate change of use. The temporary absence of a permanent occupant does not justify it.

A practical set to discuss with the notary includes the deed with the undertaking and end date, evidence of actual use, tenancy agreements and their start dates, and records of changes of occupants. On resale, add the deed containing the next buyer’s undertaking.

This is a list of preparatory materials, not a statutory form. The notary and tax specialist must clarify the evidence required under the final regime, who checks the condition and how long records must be retained.

If you manage the property from abroad, decide in advance who collects documents and reports tenant departures or changes of use. The agreement’s title alone cannot fill a gap in the chronology.

Assume the same 100 000 € gain before the holding-period allowance, after applicable adjustments to acquisition and sale values. This is not the property’s price. Other exemptions, social levies, additional taxes and special tax regimes are not modelled.

Formula: income tax = 100 000 € × (1 − allowance) × 19%. The seller’s saving in the table is current tax minus proposed tax.

For example, after 10 complete years the current allowance is 30% and the proposed allowance 40%: 100 000 × 70% × 19% = 13 300 €; 100 000 × 60% × 19% = 11 400 €. The difference is 1 900 €.

For your transaction, the seller’s notary must first establish the actual tax base and eligibility. The table’s saving does not entitle the buyer to an equivalent price reduction.

If the seller let the property furnished and claimed depreciation, its effect on the gain requires a separate check under current rules. The table starts from an already established 100 000 € base and does not remove that calculation step.

Under ordinary current rules, full holding-period exemption is reached after 22 years for income tax and 30 years for social levies. Zero income tax therefore does not mean a zero overall bill.

For non-residents, social levies depend in particular on social insurance affiliation. A single general percentage cannot automatically be applied to all foreigners, nor can the buyer’s status be attributed to the seller.

Request separate calculations for income tax, social levies, possible additional taxes and exemption grounds. This identifies which part of the amount would actually change under the proposed capital gains tax relief on property sales (amendment I-3484) in France.

Compare not only the seller’s tax saving but also what changes for you: access to the property, rental preparation costs, the timetable and penalty risk. These amounts are not equivalent.

The draft agreement should make clear whether the price depends on the relief, what happens if the rule is not enacted or the relief is refused, what information the seller confirms and what claims the parties may bring against each other.

Without a substantiated calculation, a “tax discount” claimed by the seller remains a negotiating assertion. Do not treat future savings as an established part of the transaction budget.

If the seller is already exempt from income tax because of the ordinary holding period or another confirmed basis, the additional saving on that tax may be zero. Your special undertaking cannot then be justified by a non-existent tax benefit; request the comparison and reconsider the transaction’s regime.

The buyer’s acquisition, financing, renovation and running costs are not removed by the proposed capital gains tax relief on property sales (amendment I-3484) in France. Calculate them separately from the seller’s income tax and the agreed price.

The key question is whether the property ceases to meet the undertaking. Moving from the buyer’s main residence to a tenant’s main residence is different from switching to tourist letting: the former may preserve its intended use, while the latter changes it.

When changing how the property is used, also ask the notary to check the deed’s deadlines and conditions. Do not assume every switch between personal occupation and letting is permitted without further steps.

Illness, divorce or a job change are not named in the amendment as automatic exemptions. Assess the legal consequences before changing use; a simple agreement with the seller does not replace the tax rule.

An early switch to seasonal letting cannot be treated as authorised merely because the buyer is willing to pay the penalty or reimburse the seller’s tax saving. The amendment establishes no such procedure for release from the undertaking. The steps after the period ends are explained in the question on returning to seasonal letting.

The penalty base is the price in the deed, not the capital gain or the tax relief. The example’s formula is 500 000 € × 5% = 25 000 €.

Specifying a penalty does not create a right to “buy out” the undertaking in advance or deem it discharged upon payment. Potential contractual claims by the other party cannot be described by the single figure of 5%.

If the property has already been resold, separately check who gave the breached undertaking and which deed relates to that breach. Do not use the previous price to calculate the penalty without examining the transaction’s structure.

Two checks must be distinguished. First, was the seller actually entitled to the relief: did the property, holding period and documents qualify? Second, what consequences follow from the buyer’s later conduct?

If the seller’s initial information is incorrect, the absence of a special recovery rule for another person’s breach does not establish a right to retain unjustified relief.

Representations and compensation for loss may be discussed in the agreement. Neither automatic recovery of all the seller’s loss from the buyer nor the absence of such claims can be promised: the specific contract wording and legal basis are needed.

The amendment’s direct penalty and a seller’s claim are different mechanisms. The first is specified as 5% of the price; the second cannot be calculated at that same rate without a separate basis.

If the seller proposes a compensation guarantee, ask the notary to explain which breach triggers it, which losses it covers, whether proven causally related loss is required, the monetary and time limits, and whether the arrangement itself is lawful.

Absence of such a clause in the draft shown does not prove that general rules permit no claims. Equally, there is no basis to assume the buyer must always repay the seller’s entire tax saving.

For example, with an original notarial deed in 2027, the relevant end date is 1 January 2030. On resale in 2028, the new buyer would have to undertake to maintain the use until that same date, if the corresponding rule enters into force in that form.

Before the resale agreement, provide the notary with the original deed, the undertaking’s date and terms, evidence of use and the new buyer’s draft undertaking.

The amendment does not generally guarantee that resale releases the previous buyer from every earlier breach or contractual claim. If the new buyer will not maintain main-residence use, the sale alone cannot be assumed to resolve the issue.

1. Establish the end date of the undertaking from the original notarial deed. The restriction in the text examined is not indefinite. For example, for an original purchase on 15 June 2027, main-residence use must continue until 1 January 2030. A resale in 2028 does not restart that period.

2. Confirm that the property is lawfully vacant. If the buyer occupies it personally, check the remaining deed conditions. If a tenant lives there, the end of the tax period alone does not entitle the owner to require their departure. Ordinary termination to recover the property for the owner or an eligible relative — congé pour reprise — requires main-residence use; plans for tourist letting or holidays are insufficient. Vacant possession may arise, for example, following the tenant’s voluntary departure; other grounds and procedures must be checked against the specific tenancy.

3. Before advertising to tourists, check the rules at the address. Ask the town hall whether authorisation to change the property’s use — changement d’usage — is required, and which registration is necessary. Also check building rules and complete the required tax formalities. Do not assume a previous seasonal-letting permission automatically remains valid for a new owner: establish whether it attaches to a person or property and whether it has expired.

Example: the apartment was purchased on 15 June 2027, main-residence use continued until 1 January 2030, and the tenant voluntarily vacated it on 31 March 2030. Seasonal letting can be considered after vacant possession and the required permissions and registrations, not automatically from 1 January. If the town hall does not permit tourist use, the end of the tax period does not remove that restriction.

The financial consequences differ before and after the end date. Following full compliance throughout the undertaking’s term, the amendment does not provide for a release fee, a buyer’s penalty or repayment of the seller’s relief solely because of a later switch to seasonal letting. This does not remove the costs of the new rental regime or resolve earlier breaches or errors in the original relief claim. A breach before the term ends expressly carries a buyer’s penalty of 5% of the price in the deed; potential contractual claims by the seller and the seller’s own eligibility require separate checking. Paying the penalty or the seller returning their tax saving is not described as a procedure for early release.

Prepare a separate transition budget. One-off items include preparing and equipping the property, required documents and approvals. If the address requires compensation for a change of use, establish its conditions and cost before deciding to switch. Seasonal revenue must be reduced by vacancy, platform and management fees, cleaning, utilities, insurance, maintenance and applicable taxes. Rental income tax, possible social payments and local taxes depend on the owner’s circumstances. Compare net seasonal income with net long-term rental income, not gross receipts with the former seller’s tax saving. Without an address, transition budget and occupancy forecast, there is no reliable payback estimate.

The amendment is not yet in force and does not establish the buyer’s immigration status. Planned actual occupation must be checked against residence rules and individual circumstances; an undertaking in the deed does not replace the necessary right to live in the country.

Personal tax residence, the property’s location and main-residence use are related but distinct issues. Buying a property or giving it a particular designation alone does not establish a change of tax residence.

Prepare your current country of residence, planned calendar of stays, personal-use or rental plan and the identities of the buyers. The relevant professionals must confirm legal and tax consequences. Do not assume the proposed capital gains tax relief on property sales (amendment I-3484) in France will automatically be available to you when you resell.

The buyer’s personal occupation, free occupation by an adult child and a tenancy granted to a family member are different legal bases for use. Family ties alone prove neither compliance nor breach of the future condition.

For a purchase through an SCI — a French civil company used to hold property — clarify who acquires the property and how the occupant is given the right to use it. Do not assume a company can itself “live” in the apartment or that any agreement involving a shareholder automatically suffices.

Before signing, give the notary the ownership structure, shares, actual occupation plan and legal basis for use. The specific arrangement and undertaking need checking; there is no universal permission or prohibition for family or corporate purchases.

Where ownership and use rights are split, or several people buy together, the person bound by the undertaking needs a separate assessment. The amendment does not itself describe joint and several liability for the penalty among all owners. Death, inheritance and transfers of rights must not be assumed automatically to remove consequences of earlier undertakings.

Before a contract is concluded, you can compare available dates and discuss terms if the rule is not enacted. The proposed date of 1 January 2027 does not itself guarantee relief after postponement.

Once commitments have been made, the amendment does not create an automatic right stated in its text to abandon the purchase, recover money paid or impose a new date and price on the seller.

Ask the notary to examine the amount paid and its legal basis, applicable deadlines, what permits a contract amendment and what happens if the relief does not materialise or the property is ineligible. Until then, do not treat prospective relief as a basis for delaying a payment due.

If the seller adds the main-residence requirement after the preliminary agreement, do not assume the new obligation automatically forms part of the signed document. The notary must establish what changes, whether the parties’ consent is needed, and the implications for price, timing and money already paid.

You have two distinct roles in this chain. As seller, check the old property’s category, your holding period, tax calculation and its buyer’s agreement to the undertaking. As buyer of the new property, check your own budget and the other transaction’s conditions.

Match the dates of both deeds and receipt of funds. If your sale does not fall within the final regime or your buyer rejects the condition, the calculation of funds available after tax will change.

Do not confuse the proposed capital gains tax relief on property sales (amendment I-3484) in France with separate existing exemptions linked to reinvesting sale proceeds in a main residence. They have their own requirements; a subsequent purchase alone does not establish entitlement to the proposed relief.