As part of the 2026 Budget review, a number of tax measures relating to capital gains on property are currently being discussed in Parliament.
If they are adopted as they stand, they could profoundly change the way property owners anticipate the sale of their assets, particularly second homes and rental properties.
Here are the key points to remember, with all the necessary nuances until the texts are definitively voted.
1. Total exemption reduced to 17 years (under discussion)
An amendment passed by the French National Assembly will reduce from 22 to 17 years the period of ownership required to qualify for total exemption from income tax on the sale of a second home or rental property.
What this would mean in practical terms
- Allowances for length of ownership would be accelerated.
- The income tax exemption would apply from year 17ᵉ, compared with year 22ᵉ at present.
- Taxation would become more advantageous for owners of long-established properties.
👉 At this stage, this measure is not definitive, but it points to a clear trend: making it easier to move out of secondary and rental properties.
2. A rise in social security contributions to 18.6% (PLFSS 2026)
At the same time, as part of the PLFSS 2026, the National Assembly voted to increase social security contributions on income from property, including capital gains.
Rates could rise from 17.2% to around 18.6%.
This would mean :
- slightly higher social taxes,
- but income tax will fall more quickly thanks to the shorter exemption period.
👉 Here again, the measure is in the parliamentary shuttle, so is subject to adjustments.
3. Principal residence: an exemption that could be regulated
Even today, capital gains realised on a principal residence are fully exempt, with no minimum holding period.
However, an amendment adopted by the French National Assembly would restrict this exemption to homes that have been occupied as a principal residence for at least 5 years.
- This is not an existing right,
- but rather a possible development that remains under discussion as part of the 2026 budget.
👉 To put it plainly: the principal residence would remain exempt, but with a minimum occupancy criterion that could change things for some sellers if the measure is confirmed.
4. A market that could open up
These adjustments – if adopted – could encourage :
- Faster sales of second homes,
- investor arbitrage,
- renewed fluidity in markets hitherto blocked by taxation,
- a stronger dynamic in tourist areas, coastal areas and areas with high rental activity.
Already, owners are beginning to question whether or not they should wait until 2026 to sell.
5. Rethink your sales strategy to suit your situation
The possible reform clearly invites owners to :
- analyse their current holding period,
- compare their potential taxation before and after 2026,
- accurately estimate the taxable capital gain,
- choose the best time to sell based on their personal situation.
In some cases, waiting until 2026 could be fiscally advantageous; in others, on the contrary, a sale in 2025 could be more appropriate.
👉 A personalised analysis is essential, as the gain or loss will depend directly on the amount of the capital gain, the holding period and the final outcome of the legislation.
Conclusion
If adopted as they stand, the measures currently being discussed as part of the 2026 Budget could radically transform the taxation of capital gains on property.
Between a total exemption reduced to 17 years, an increase in social security contributions to around 18.6%, and a possible restriction of the exemption on the principal residence after 5 years of occupation, owners will more than ever have to adapt their sales strategy to a changing tax environment.
Are you wondering about the tax impact or the right time to put your property on the market?
Our agency can help you every step of the way.
Get an estimate of your property here or contact us directly by email.
