French surtax on property gains over €50,000

Who pays it

The tax applies to the same sellers as the taxation of individuals’ capital gains (BOI-RFPI-TPVIE-10, § 10 to 90):

• individuals selling a property from their private assets;
• partnerships subject to income tax, such as an SCI (property-holding company) not subject to corporation tax, which are themselves liable;
• non-residents subject to the levy under article 244 bis A of the CGI.

It is not paid by companies subject to corporation tax, by professionals such as marchands de biens (property dealers), or by recipients of old-age or disability pensions who meet the income conditions of article 150 U, III (BOI-RFPI-TPVIE-10, § 20 to 40). Gifts and inheritances fall outside its scope: only sales for consideration are covered (§ 130).

Sales that escape it

The tax base is the same as for income tax: a gain exempt from income tax is not taxed (BOI-RFPI-TPVIE-10, § 210). The following therefore escape the surtax:

• the sale of the résidence principale (main home) and its outbuildings;
• the former main home of a person who has moved into a care home for the elderly or disabled, sold within two years;
• the first sale of a home other than the main home, up to the fraction of the price reinvested within 24 months;
• properties held for more than 22 years, exempt from income tax through the holding-period allowance;
• building land within the meaning of VAT (§ 120), which remains subject to capital gains tax but not to the surtax.

Details of these exemptions are in our guide on cas d’exonération de plus-value (capital gains exemptions).

How the €50,000 threshold is assessed

The tax applies to the amount of the net taxable gain. The €50,000 threshold is assessed after the holding-period allowance and, where applicable, after the fraction exempt through reinvestment (BOI-RFPI-TPVIE-20, § 20). To calculate the net gain, see our guide on plus-value immobilière (property capital gains).

When several people sell together, the threshold is calculated by share (§ 30 to 50):

• co-owners in indivision (joint ownership) and cohabiting partners: each is a separate seller;
• PACS partners (civil partners): treated as co-owners in indivision;
• spouses selling a jointly owned marital property: the tax authority accepts that the threshold is assessed on each spouse’s share. A couple making a net gain of €90,000 (€45,000 each) does not pay the tax.

This per-spouse assessment applies to the surtax. It does not apply to the tax representative waiver for a non-resident seller: there, the €150,000 threshold concerns the price, and a married couple, or PACS partners taxed jointly, count as a single seller (BOI-RFPI-PVINR-30-20, § 180; see our guide on the représentant fiscal (tax representative)).

Non-residents: where the seller benefits from the €150,000 exemption reserved for certain non-residents, the threshold is assessed on the fraction above €150,000. With a net gain of €220,000, the tax applies to €70,000 (§ 20; BOI-RFPI-PVINR-10-20, § 430).

The scale and smoothing

The scale applies to the total amount of the taxable gain (G), from the first euro (BOI-RFPI-TPVIE-20, § 70):

The smoothing rows prevent one extra euro from making the tax jump: the reduction falls to zero at €60,000, €110,000, €160,000, €210,000 and €260,000.

Worked examples

Gain of €55,000: 2% × 55,000 = €1,100; reduction (60,000 − 55,000) × 1/20 = €250. Tax: €850.

The BOFiP example: a flat bought for €90,000 and sold for €200,000 after six years of ownership. Gross gain €110,000; allowance of 6% (one year beyond the fifth), i.e. €6,600; net gain €103,400. Tax: 3% × 103,400 = €3,102, minus (110,000 − 103,400) × 1/10 = €660, i.e. €2,442 (BOI-RFPI-TPVIE-20, § 75).

Return and payment

The tax is calculated on the capital gains return (2048-IMM-SD for a property, 2048-M-SD for shares in a company whose assets are mainly property) and paid when the deed is registered. If it is not paid, or if the amount paid does not match the amount due, registration is refused (BOI-RFPI-TPVIE-20, § 80 to 110). For a non-resident, it is paid under the responsibility of their tax representative where one must be appointed (§ 110). Service-public.gouv.fr specifies that in practice the notaire calculates it. The calculateur de plus-value (capital gains calculator) includes this scale.

Which professional to consult

The notaire (notary) calculates the capital gain and the surtax, completes form 2048-IMM-SD and pays the sums at the signing of the deed: they are the one who can work out the seller’s net proceeds before signing. The agent immobilier (estate agent) helps set the sale price, which determines whether the gain crosses a threshold on the scale.