What is the added value on a main residence?

When You Sell Real Estate for More Than You Bought It, the Added Value Achieved Is in principle Taxed on Real Estate Capital Gains. However, if the property sold Is the Seller's Main Residence, he can Benefit from this exemption Total tax.

In this article, we explain Exemption conditions, how is capital gain calculated, and what you need to know about real estate taxation.

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Definition of Real Estate Capital Gain and Tax Rules

1. What is real estate capital gain?

La Real Estate Capital Gain Is the gain made when selling a property, calculated by subtracting the Acquisition price Ofthe Selling price. This benefit is subject to taxation, unless there is a specific exemption.

Concrete example:

• Buying an apartment in 2015 to 200,000€.
• Resale in 2025 to 300,000€.
• La Realized value Is of €100,000.

However, it should be noted that the Acquisition price May be increased by Acquisition costs (notary fees, registration fees) and some Work Carried Out on the Property. Conversely, the Selling price Can be reduced transaction fees, such as Agency Fees.

Thus, in some cases, these adjustments make it possible to Reduce the amount of taxable capital gain And, therefore, the tax due.

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2. When is capital gain taxed?

The taxation of real estate capital gain occurs at the time of Transfer of the Property. She is subject to Two Levels of Taxation :

✅ 19% income tax

✅ 17.2% social security contributions

This represents a total of 36.2% of taxation on taxable capital gain.

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Example of tax calculation:

If the taxable capital gain is 50,000€, the seller will have to pay approximately €18,100 taxes (€9,500 in income tax + €8,600 in social security contributions).

However, some allowances for Length of Detention Allow Reduce This Tax Burden, or Even to Eliminate It Later 30 Years of Detention.

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3. Who is affected by this taxation?

Real estate capital gains tax concerns all real estate transactions where a gain is made, in particular in the following cases:

✔️ Sale of a Second Home : Unlike a main residence, a second home is subject to capital gain tax, with some exceptions.

✔️ Sale of Land, Forests or Rental Properties : Any real estate that is not occupied as a main residence is concerned.

✔️ Sale of a home other than the main residence : If the property sold is not the seller's main residence At the Time of Sale, the capital gain is taxable, unless there is a specific exemption.

✔️ Sale of real estate owned via an SCI : If the SCI is subject toIncome tax (IR), the added value achieved is directly taxed in the hands of the partners. On the other hand, if the SCI is atCorporate tax (IS), the capital gain is integrated into the company's fiscal result.

✔️ Exchange or division of property in the context of a divorce or inheritance : In the event of an amicable division of real estate between former spouses or heirs, taxation may apply if one of the beneficiaries immediately resells his share with a gain.

In these situations, it is essential to anticipate the applicable taxation well and to find out about Possible exemptions.

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Exemption from Capital Gain for the Main Residence

1. Conditions to be fully exempt

A Salesman Can Be Completely Exempt Of taxation on real estate capital gain if the property Is the Seller's Main Residence At January 1st Of the year of transfer.

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The conditions required for the exemption:

✔️ The property must be The Usual and Effective Main Residence Of the seller.

✔️ He Must Be Busy Most of the Year Prior to the Sale.

✔️ Tea Immediate Dependencies (garage, cellar) must be sold Simultaneously.

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2. Exemption deadlines

The exemption only applies if the Put Up for Sale Is Carried Out in a Normal Delay After the property has grown to be the primary residence.

📌 Your note :

If the Seller Leaves the Home More than 1 year before the sale, He Risks Losing the Exemption and Being Taxed on Real Estate Capital Gains.

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Influence of the Length of Detention on the Exemption

1. Abatements for length of detention

If the property sold is not Not a primary residence, the added value can benefit from a progressive deduction Depending on Years of Detention.

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This Means That If The Property Is Owned Over 22 years, the capital gain tax is Exonerated, and after 30 years, tea Social Security Contributions are also removed.

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Declaration and payment of capital gains tax

1. Who handles the declaration and the payment?

The notary is responsible for:

📌 Calculate the exact amount of taxable capital gain.

📌 Establishing the Tax declaration.

📌 Pay tax due directly to Public Treasury.

Taxation is Taken Immediately Upon Sale, even if the payment for the goods is made in several installations.

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2. When should capital gains be declared?

The declaration of real estate capital gain must be included in the tax return for The Year Following That of the Transfer good.

Example:

• Sale completed on December 31, 2024.
• The capital gain is declared to Taxes in 2025.

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Special cases and specific exemptions

1. Exemption for sales under €15,000

If the Selling price Of a property is less than €15,000, the added value achieved is not Not taxable.

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2. Exemption for sale to a social organization

If the property is sold to a Social Housing Organization, it may be Exempt from Capital Gain under certain conditions.

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3. Exemption for non-residents

A seller who is not a French tax resident can benefit from an exemption under certain conditions, in particular if he has been Resident in France for at least 2 years Before the sale.

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Read this article to find out how to sell your primary residence.

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Conclusion

Exemption from Real Estate Capital Gain On the Main residence Is a Major Tax Advantage, Allowing You to Sell Your Property Without taxation.

However, it is important to meet certain conditions for Benefit from this exemption :

• Occupy the Property as a Main Residence.
• Sell It Within a Reasonable Time After Departure.
• Respect the rules of the tax administration.

Before selling, it is recommended that you consult a Notary or Tax Expert To optimize its Wealth strategy and avoid any unpleasant surprises.

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❓ FAQ

1. Does a primary residence have to be declared to benefit from the exemption?

No, the tax authorities automatically consider a property to be a main residence if it is Occupied in a Usual and Effective Manner.

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2. Is an exemption possible for a second home?

No, unless the seller reinvests the entire sale price in The Purchase of a New Main Residence Within 2 Years.

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3. How to avoid being taxed on real estate capital gains?

The exemption automatically applies to Main residence. For other properties, it is necessary to prefer a Long-term detention (22 to 30 years) to benefit from progressive discounts.

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