11. French Capital Gains Tax

1. 11.1. Real Estate Exemptions
   11.2. Real Estate Deductions
   11.3. Tax Rate
   11.4. Shares and Personal Property
   11.5. Development Land
   11.6. Your Former Home

11.6. Capital Gains Tax on Your Former Home

If you become permanently resident in France, and then subsequently sell the property, you could become liable for capital gains tax on the sale proceeds.

The trigger point for liability will depend on the terms of any double taxation treaty between France and your home country.

In the case of former residents of the UK:

• There is an exemption from capital gains tax by the UK tax authorities on the disposal of the main residence for a period of five years.
• The sale of the property is also exempt from capital gains tax in France, which is uniquely taxable in the UK.

The concession applies provided you do not relocate permanently back to the UK within 5 years of leaving the country.

However, the rule is about to change, as a new draft tax treaty signed between France and UK (yet to come into force) will make you liable for capital gains in France on the future sale of your former home.

However, you will be entitled to the same relief as you would otherwise receive if the property was located in France. That is to say, from the sixth year of ownership there is 10% relief for each year you have owned the property, with full relief after 15 years ownership.