Real Estate Investment: Soon — Zero Capital Gains Tax After 10 Years of Ownership?

The proposal suggests reducing the holding period required for full exemption from capital gains tax on property sales to 10 years. It also proposes a moratorium on the ban on renting so-called “energy sieves” — properties with low energy efficiency.

Tired of paying a second property tax and regularly funding renovations, you may be seriously considering selling your country house. The catch? You’ll face capital gains tax on the sale. Except for a primary residence, capital gains on property sales are subject to income tax (19%) and social contributions (17.2%) — a total tax rate of 36.2% on the profit from selling a secondary residence or a rental investment.

However, the taxable gain is reduced by progressive deductions based on the length of ownership, which in turn reduces both income tax and social contributions. From the 6th to the 21st year of ownership, there’s a 6% annual deduction from the capital gain, and a 1.65% deduction on social contributions. After 22 years, you’re fully exempt from income tax, and after 30 years — from social contributions. Not exactly an incentive to sell quickly!

Identical deductions for income tax and social contributions

As MP Éric Ciotti from the UDR (Union of the Right for the Republic) reminds us in his explanatory note, before the reform implemented by former Prime Minister François Fillon in 2012, full capital gains tax exemption applied after 15 years of ownership — for both income tax and social levies. According to Ciotti, the extended holding period negatively impacts the real estate market: fearing high taxation, owners tend to hold onto their properties instead of selling them to younger generations or those in need. He proposes reducing the holding period to 10 years for full exemption from both taxes.

Additionally, the bill introduces a “moratorium” (details unspecified) on the ban on renting energy-inefficient homes. Under the 2021 Climate and Resilience Law, renting properties rated G for energy performance has been banned since January 1, 2025. The ban will extend to class F homes in 2028, and to class E in 2034. “The cost of energy renovations, often unaffordable for small landlords, is becoming increasingly difficult to bear in a context of limited access to credit,” argues the MP. “By removing thousands of homes that don’t yet meet these standards from the rental market, we are mechanically reducing the available housing supply — even as demand continues to grow,” he adds.

For these proposals to take effect, the bill must first be reviewed and passed by Parliament. Ciotti hopes it will come into force on January 1, 2026.
Looking for real estate in France? We offer a full range of services—from finding the perfect home to completing the deal, with no hidden fees. Your dream home in France is closer than you think!