Capital losses on real estate: why a loss on resale does not reduce your tax

No. If you resell a property for less than you paid for it, the tax authorities do not take this loss into account. According to impots.gouv.fr, the capital loss cannot be offset against capital gains of the same nature, nor can it be deducted from your overall income. The BOFiP (Official Bulletin of Public Finances) states the principle clearly: "The gross capital loss realized on real estate or rights relating to such property is not taken into account." Two narrow exceptions exist.

This page covers the principle, its two exceptions, and a numerical example for a French resident. It does not address the case of a non-resident, the notary formalities involved in the event of a capital loss, or the rules applicable to financial investments.

The principle: the loss is not taken into account in any calculation.

Three official sources agree.

Two practical consequences.

• Same year, same result. Selling one property at a loss and another at a profit in the same year does not change the taxation of the second. The loss is not offset.
• No effect on reference taxable income. According to impots.gouv.fr, the capital loss has no effect on the calculation of the reference tax income, and it is not necessary to mention it on the income tax return.

How is a loss in value measured?

The notice 2048-IMM-NOT-SD (May 2026 edition) gives the definition: "The gross capital gain or loss is equal to the difference between the sale price and the acquisition price by the seller."«

Two clarifications from official sources.

• The purchase price may be increased by two fixed amounts: 7.5 % of the purchase price for acquisition costs, in the absence of proof of actual costs, and 15 % of the purchase price for work if the property has been held for more than 5 years (service-public.gouv.fr).
• For an asset received in inheritance, the capital gain or loss corresponds to the difference between the sale price and the value declared at the time of inheritance (economie.gouv.fr, page written on 06/07/2026).

The two exceptions in the BOFiP

The BOFiP (BOI-RFPI-PVI-20-20, § 100 to 180) provides for two exceptions. Both concern specific situations. Neither applies to the ordinary resale of an apartment or house.

1. The sale of a building acquired in successive installments as a single block

This exception applies when the same building has been acquired in several stages (by successive undivided shares, by successive divided rights, or by the merger of two units acquired on different dates, for consideration or free of charge) and is sold as a whole.

• Conditions of sale. The sale is evidenced by a single document, "subject to publication or registration, and between the same parties".
• Calculation. The gross capital gain or loss is determined separately for each fraction. Gross capital losses are reduced by the allowance for holding period, then offset against gross capital gains adjusted by this allowance.
• Result. If the balance is negative, "the capital loss is not taken into account." If it is positive, it is subject to income tax and social security contributions.

Service-public.gouv.fr gives this example to illustrate the "exceptional" case.

2. The merger of SCPIs

In the event of a merger of real estate investment companies, the BOFiP (French Official Tax Bulletin) describes a transfer for consideration for the absorbed company. It allows for offsetting capital gains and losses on the absorbed company's properties. This applies to individuals and partnerships holding the units in their private assets. Gross capital losses are first reduced by the holding period allowance. A negative result "cannot be offset.".

Sale by lots: no compensation between lots

The BOFiP also addresses the case of a property sold in separate lots. Capital losses realized on some lots cannot be offset against capital gains realized on other portions of the same property, except as described above. The fact that the sales take place in the same year is irrelevant.

Capital loss on real estate: a numerical example (fictitious profile)

Situation. Sophie, a French tax resident, sells two properties in the same year, each held for four years. Property A is sold with a gross capital loss of €20,000. Property B is sold with a gross capital gain of €30,000. Neither a fixed allowance nor fees are taken into account (assumptions of a hypothetical profile). No tax relief is available before the sixth year of ownership, and the taxable capital gain on Property B remains below €50,000: no additional tax is due.

Issue. Does the loss on property A reduce the capital gains tax on property B?

Strategy. Applying the principle of the BOFiP (French Official Tax Bulletin): the capital loss on property A is not taken into account, even if the capital gain on property B is realized in the same year. Capital gain rate for B: 19% income tax and 17.2% social security contributions (service-public.gouv.fr and economie.gouv.fr).

Result.

On paper, the sum of the two sales results in a gain of €10,000 (€30,000 minus €20,000). However, the tax of €10,860 is calculated on €30,000, and it exceeds this net gain. In this example, the loss on property A does not reduce the tax base of property B.

This profile is fictitious. The amounts are hypothetical and unrelated to any actual case. The calculation does not take into account sales costs, any applicable exemptions for the properties, or the personal circumstances of a real case. It illustrates the process and is not indicative of your specific situation.

Capital loss on real estate: what changes depending on your situation

• The nature of the operation. Simple resale of a property, bulk sale of a building acquired in fractions, or merger of SCPIs: the exceptions only apply in these last two cases.
• The story of the acquisition. A building acquired in several installments on different dates is not treated as a single purchase.
• The origin of the good. For an asset received through inheritance, the reference is the value declared at the time of inheritance.
• The deed of sale. The exception of successive fractions presupposes the same act, between the same parties.
• The nature of what is being sold. The principle concerns the property itself and the rights relating to that property.

The rule depends on your situation. No results are guaranteed.