Real estate expert


Exemption from capital gains on the sale of a principal residence

The capital gain generated by the sale of the main residence is exempt from income tax (flat rate of 19%) and social charges (at the rate of 17.2%), regardless of the type of property ( individual house, chalet or apartment).

It is sufficient that the accommodation sold is the seller's main residence on the day of the transfer to be eligible for the exemption.

The question that recently appeared in the decision of the Paris Court of Appeal concerns the exemption from capital gain in the case of a sale of a principal residence in which the taxpayer lived only a short time, knowing that this sale took place after several real estate transactions.

Qualification criteria for the main residence

The places of usual, normal and effective residence of the owner are qualified as main residences.

Usual, normal and effective residence of the owner

The residence in which the taxpayer lives for most of the year.
If the taxpayer lives six months a year in one place and six months in another, the main place of residence is the one for which the person receives a reduction in housing tax.

Actual place of residence

To be considered the principal residence, it must be the taxpayer's actual residence.
Temporary use of accommodation cannot be considered sufficient for the apartment to be a main residence that can benefit from the exemption.
The qualification of permanent residence and effective stay belongs to the administration, which must be assessed under the supervision of a tax judge.

There are no concepts of dates or duration of occupation

The tax authorities do not accept the concept of periods in order to benefit from the capital gain exemption for the main residence.
Theoretically, as long as it is a normal, usual and effective place of residence, you can benefit from the capital gain exemption.
Exemptions are however refused if the occupation at the time of sale corresponds to reasons of pure convenience. This is the case when the owner, voluntarily and intentionally, returns to occupy the house just before the sale.

According to a recent decision of February 21, 2018 (Judgment of the CAA of PARIS, 2nd room, February 21, 2018, 17PA00527), the only circumstance that the occupation of the main home lasted eight and a half months was, in short, in as such the advantages resulting from the exemption from the taxation of capital gains (provided for by the provisions of article 150 U, II-1 ° of the CGI).

The same applies to the fact that the transfer of the main residence took place after several real estate transactions.

In this case, the Paris Court of Appeal held that, having regard to the elements generally accepted by case law (in particular large electricity bills, parking cards and notices, listing the apartment housing tax sold as principal residences).


To be exempt from capital gains when selling your main residence, it does not matter that the residence is briefly occupied, only the concept of habitual and effective residence is to be taken into account.

Source: Cabinet Roche & Cie, English speaking accountant in Lyon, France - Specialist in French Real-Estate and Non-resident taxation.

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