First sale outside of primary residence: capital gains tax exemption through reinvestment within 24 months

Yes, in one specific case. If you sell a property that is not your primary residence, the capital gain is exempt up to the amount of the sale price that you reinvest, within 24 months, to buy or build your primary residence. Two conditions must be met: you must not have owned your primary residence for the four years preceding the sale, and you must not have already benefited from this exemption, which applies only to one sale per individual since February 1, 2012. The exemption must be requested in the deed of sale and can only be claimed once.

This page deals with individuals who are tax residents of France. It does not cover non-residents, reinvestment outside of France, or the detailed justification for reinvestment. For the calculation of the capital gain itself, see the page on capital gains from real estate for residents.

The conditions, point by point

The BOFiP (BOI-RFPI-PVI-10-40-30) describes this exemption in paragraph 1 bis of section II of Article 150 U of the French General Tax Code (CGI). It applies to transfers that took place since February 1, 2012.

Service-public.gouv.fr (verified on 15/04/2026) sets the same conditions: not having owned the main residence in the four years preceding the sale, and the price used to buy or build the main residence within 2 years.

The four-year condition

It considers the ownership of the principal residence, whether direct or indirect. The BOFiP (Official Bulletin of Public Finances) covers direct or indirect ownership, including through a company with tax transparency, ownership of a divided or undivided right, and ownership by a company, group, or organization. For a married couple, ownership of the principal residence by only one spouse as separate property does not disqualify the other spouse from the exemption.

The BOFiP also recognizes a specific situation: the seller buys their future main residence before selling the property, notably through a bridging loan. Three additional conditions apply: the property is put up for sale before the acquisition of the main residence, the sale takes place within a normal timeframe after this acquisition, and the sale proceeds are actually reinvested.

The first session, only once

The BOFiP (Official Bulletin of Public Finances) states: "Thus, the exemption can only be applied once." It applies to the first sale of a dwelling occurring since February 1, 2012, and each individual benefits from it only for one sale. Regarding the seller's previous sales, the BOFiP (§ 150) states that the exemption remains possible "even if the seller has previously sold one or more dwellings": this detail is confirmed in the text, based on your sales history. The exemption is not automatic: it applies upon request from the seller, through a clause included in the deed of sale. If no request is made, the standard rules apply.

Reuse: what counts and what doesn't

The taxpayer must reinvest all or part of the sale price within twenty-four months. Reinvestment consists of acquiring or constructing a dwelling to be used as a principal residence.

• Full ownership. The BOFiP (French Official Tax Bulletin) requires reinvestment in full ownership. Divided ownership rights are excluded. Shares in companies with tax transparency are permitted, provided that the partners are deemed to be the direct owners of the property.
• No shares in opaque companies. The acquisition of shares in GFA or SCPI does not allow reinvestment, nor does the contribution to a company.
• A ceiling. The reused portion cannot exceed the cost of acquiring or constructing the dwelling.
• No minimum duration. The exemption is not subject to any minimum holding period for the property.

Partial reinvestment: a proportional exemption

Capital gains are exempt up to the amount of the sale price that is reinvested. The amount you intend to reinvest must be stated in the deed of sale.

The BOFiP (French Official Tax Bulletin) provides an example: sale price of €300,000, capital gain of €120,000, reinvestment of €180,000. The reinvestment represents 60% of the price, i.e., €72,000 of tax-exempt capital gain. €48,000 remains taxable.

Exceptions to the redeployment period

The exemption is not called into question if the taxpayer, or a member of the couple subject to joint taxation, is affected by a 2nd or 3rd category disability, is subject to a termination of their employment contract at the initiative of the employer (the BOFiP refers to employees dismissed or retired), or dies.

If the conditions are not met

The BOFiP (Official Bulletin of Public Finances) stipulates that the exemption will be revoked if the reinvestment is not made within 24 months (subject to the exceptions mentioned above), if the conditions regarding the property sold or the four-year holding period are not met, or if the property is not used as the principal residence. Income tax and social security contributions are then due, with late payment interest accruing from the first day of the month following the sale.

Couples and joint ownership

The conditions are assessed separately for each spouse and for each co-owner. If one spouse has already benefited from the exemption, only the other can benefit from it, up to half of their share.

What is declared

• Total reuse. No declaration is required for the exempt capital gain: the BOFiP (Official Bulletin of Public Finances) states, "No declaration must be filed when the capital gain is fully exempt." The nature and basis of the exemption are specified in the deed.
• Partial exemption. The 2048-IMM-SD declaration is filed, along with the payment of tax on the remaining taxable portion.
• Reference notice. For transfers occurring on or after February 21, 2026, the 2048-IMM-NOT-SD form (May 2026 edition) indicates that only the amount of the partial exemption is reported on line 45. In the case of a full exemption, taxpayers are not required to file form 2048-IMM-SD.

The rates that apply to the taxable portion

The portion of capital gains that remains taxable is subject to 19% of income tax and 17.2% of social security contributions (service-public.gouv.fr, verified on April 15, 2026 and June 30, 2026). The 2026 increase in the CSG (General Social Contribution) does not apply to capital gains on real estate: they remain subject to 9.2% of CSG. The allowance for holding period only begins after the fifth year, and an additional tax applies if the taxable capital gain exceeds €50,000.

Initial sale and reinvestment: a numerical example (fictitious profile)

Situation. Claire has been renting her primary residence for over four years. She sells a studio apartment she rents out, which she bought four years earlier, for €300,000 (sale price). The gross capital gain is €45,000 (hypothetical scenario; no fixed allowance or fees are taken into account). No tax relief is available before the sixth year, and the taxable capital gain remains below €50,000: no additional tax is due. She is now preparing to buy her primary residence.

Issue. What is the tax based on the portion of the price that is reinvested within 24 months?

Strategy. Request the exemption by including a clause in the deed of sale, then reinvest within the specified timeframe. Application of the BOFiP rule: capital gain exempt up to the amount of the price reinvested.

Result.

This profile is fictitious. The amounts are hypothetical. The calculation assumes that the conditions for the exemption are met and that it was requested in the deed. It does not take into account sales costs or the personal circumstances of a real case, and it does not predict your outcome.

First sale and reinvestment: what changes depending on your situation

• Your ownership of the main residence during the four years preceding the sale, including joint ownership or via a company.
• The exemption you would have already benefited from : it only applies to one transfer per person, and the BOFiP deals with the case of previous sales (§ 150).
• The nature of the property sold : accommodation or not.
• The form of reuse : full ownership, purchase or construction, and part of the price reinvested.
• Your relationship situation : the conditions are assessed for each spouse.
• Your tax domicile on the day of the transfer.

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