French Second Homes: How Capital Gains Tax ‘Abatement’ Works (2025)
The tax exemption on the sale of a property depends on how long the owner has held it. French MPs have voted to reduce the required ownership period to be exempt from capital gains tax by five years to boost market fluidity in high-demand areas.
On November 3, the Assemblée nationale approved an amendment to the 2026 budget's [translate:projet de loi de finances (PLF)]. If enacted, it will cut the exemption threshold from 22 to 17 years.
Currently, in France, properties used as the owner’s main residence are exempt from capital gains tax regardless of how long they have been held. In contrast, second homes are taxed if sold before 22 years from purchase.
- After 22 years, owners are fully exempt from capital gains tax but still pay social charges if selling between years 23 and 30.
- After 30 years, owners are exempt from both capital gains tax and social charges.
Tax reductions, known as [translate:‘abatement’], apply each year during ownership. The amendment would shorten the period necessary for full exemption from 22 to 17 years.
An example from the French tax authority illustrates the tax treatment of an apartment bought on May 2, 2000.
This reform aims to support the housing market by making capital gains tax rules more favorable to owners of second homes in sought-after locations.
Author's summary: New legislation may cut the second-home capital gains tax exemption period from 22 to 17 years, encouraging sales and improving market flexibility in France.