Second home on the Alabaster Coast : capital gain on sale

The sale of a second home on the Alabaster Coast may generate a taxable capital gain, but the result depends on the calculation used, allowable costs, the period of ownership and the exemptions provided for by law.

For an owner in Veules-les-Roses, Saint-Valery-en-Caux, Dieppe or the Caux area, the main issue is to make sure the tax basis is reliable before signing. A family home kept for a long time, a farmhouse received through inheritance or an old renovated property do not necessarily result in the same tax liability.

Key points to remember

• The capital gain corresponds to the difference between the sale price and the acquisition price, with several possible adjustments.
• A main residence is exempt, but a second home may also qualify, depending on the circumstances, for an exemption or allowances.
• After allowances, the net taxable capital gain is in principle subject to income tax at the rate of 19 % and social security contributions at the rate of 17.2 %; a seller affiliated to the compulsory social security scheme of another country in the European Economic Area or Switzerland pays, subject to conditions, only the solidarity levy of 7.5 %.
• After 22 years of ownership, property capital gains are exempt from income tax; after 30 years, the exemption also extends to social security contributions.
• An additional tax may be added if the taxable capital gain exceeds €50,000, at a rate of 2 % to 6 %.

Second home : in which cases is the capital gain taxed ?

When you resell a property for more than its acquisition cost, you make a capital gain. For a second home, this gain is generally subject to income tax and social security contributions.

According to Service Public, the automatic exemption applies to the main residence, meaning the property occupied habitually and effectively for most of the year. A holiday home or pied-à-terre therefore generally does not fall into this category.

That said, a second home does not necessarily mean systematic taxation. An exemption may result from the length of ownership, a limited sale price, the seller’s personal circumstances, a first disposal under certain conditions, or specific rules applicable to non-residents.

How is the gross capital gain calculated?

The calculation is based on comparing the sale price with the purchase price. These two amounts may nevertheless be adjusted.

The sale price used

The starting point is the price stated in the deed. It may be reduced, upon presentation of supporting documents, by certain costs incurred for the sale, such as compulsory surveys. Conversely, sums paid for your benefit increase it.

The acquisition price used

In the event of purchase, the basis used corresponds to the amount actually paid and stated in the deed. This basis may then be increased in several cases:

• costs and compensation paid to the seller, at their actual amount;
• acquisition costs, at their actual documented amount or as a flat rate of 7.5 % of the purchase price;
• certain expenditure on works, subject to conditions, at its justified actual amount or as a flat rate of 15 % of the purchase price when the property has been held for more than 5 years;
• road, utility and distribution network costs.

If the property was rented furnished as a non-professional landlord, the depreciation deducted is, subject to certain conditions, reintegrated into the calculation of the capital gain for sales completed since 15 February 2025 : it reduces the acquisition price used, according to Service Public.

If the property was received by gift or inheritance, the reference is not a former price paid by the family. The acquisition basis is then the value used to calculate the duties at the time of transfer, as stated in the deed of gift or inheritance declaration. According to impots.gouv.fr, costs paid, such as notary fees and registration duties, increase this value. The flat rate of 7.5 % applies to the acquisition costs of a purchased property.

For properties transferred between generations, this point can have a significant impact on the final calculation. The value declared when the property was transferred remains the reference: a valuation made at the time of sale does not replace it. A market-value appraisal is used to establish the value of a property on a given date, for example in connection with a gift, inheritance or ongoing division of assets.

Which costs and works can legally optimise the taxable base?

The issue is not to circumvent the rule, but to correctly apply what the legislation permits. In practice, an overestimated capital gain often results from an incomplete file.

The most common omissions are as follows:

• for a purchased property, do not include acquisition costs even though they may be deducted on an actual-cost basis or via the flat-rate allowance of 7.5 % of the purchase price;
• leaving eligible works out;
• confuse routine maintenance with expenditure on construction, reconstruction, extension or improvement;
• no longer having the necessary supporting documents;
• for a property received by gift or inheritance, forget to add the notary fees and registration duties paid to the declared value.

For an old second home, it is best to gather the deeds, invoices, reports and transfer documents before the sale. The notary calculates the tax: for costs and works taken at their actual amount, they need supporting documents. Otherwise, the flat rates of 7.5 % (acquisition costs for a purchased property) and 15 % (works, property held for more than 5 years) may apply.

When an inheritance, gift or partition is in progress, Cabinet Soudey, based in Veules-les-Roses for over 70 years, provides, in particular, property valuation expertise.

Length of ownership: the major impact on taxation

The length of ownership gradually reduces the taxable base through allowances. The basis is not the same for income tax and social security contributions.

Service Public provides the following scale:

• up to the 5th year, no allowance applies ;
• from the 6th to the 21st year, the allowance is 6 % per year for income tax and 1.65 % per year for social security contributions;
• for the 22e completed year, it is 4 % for income tax and 1.6 % for social security contributions;
• after the 22nd year, the capital gain is exempt from income tax and the allowance for social security contributions is 9 % per year;
• after the 30th year, the exemption also extends to social security contributions.

For example, for a property held for 25 years, the capital gain is exempt from income tax and the allowance for social security deductions reaches 55 % (26.4 % + 1.6 % + 27 %), according to the example from Service Public.

For family homes held for a long time, the exact date on which ownership began should therefore be checked carefully before the sale.

Which exemptions may apply to a second home ?

A second home is not always taxed. Several exemptions exist, but they are strictly regulated.

The first sale of a property other than the main residence

You may be exempt if you dispose of a property other than your main residence and meet two cumulative conditions:

• allocate the sale proceeds to the purchase or construction of your main residence within 2 years;
• not having owned your main residence during the 4 years preceding the sale.

The exemption must be requested in the deed and may only be used once. If only part of the price is reinvested, the exemption applies to a proportion of the capital gain corresponding to the fraction of the price reinvested: for example, if 60% of the price is used to purchase the main residence, 60% of the capital gain is exempt.

The sale price does not exceed €15,000

The sale is exempt when the price does not exceed €15,000. This situation mainly concerns specific disposals.

The seller’s personal circumstances

Exemptions subject to income conditions also exist for sellers who receive an old-age or survivor's pension, or who have an inclusion mobility disability card (themselves or their spouse). Another conditional exemption concerns people living in a residential facility for older people or disabled adults, but only for the sale of their former main residence: it does not apply to a second home.

For a disposal in 2026, Service Public gives the following conditions:

• old-age or survivor’s pension, or an inclusion mobility card with invalidity status: a reference taxable income of 2024 not exceeding €12,793 for the 1st share of family quotient, plus €3,428 per additional half-share;
• entry into a residential care facility: 2024 income not exceeding €30,024 for the first share, plus €7,015 for the first additional half-share and €5,522 for the following half-shares ; the former main residence must be sold within 2 years following entry into the facility and must not have been occupied (rented or lent), except by the spouse ;
• in all these cases, not be subject to IFI for the year before the last one preceding the sale.

Other exemptions relate to the property or the buyer, rather than the seller's circumstances: sale of a right to add additional storeys until 31 December 2026, sale to a social housing organisation or a private operator undertaking to build social housing until 31 December 2027, or expropriated property if the entire compensation is reinvested within 12 months.

Non-resident: a common case for holiday homes

On the Alabaster Coast, some owners live outside France while retaining a family home. The capital gain remains taxable in principle under the same conditions as for a resident, subject to international tax treaties.

Specific exemptions are nevertheless provided for. The sale of the main residence may be exempt if it takes place no later than 31 December of the year following the transfer of the tax residence outside France and if the property was not made available to a third party between departure and sale.

For another residence, an exemption is available up to a capital gain of €150,000 and for one residence per taxpayer, subject to two cumulative conditions: being a national of a country of the European Union or the European Economic Area that has concluded an agreement with France, and having been tax resident in France continuously for at least 2 years. According to Service Public, the sale must take place no later than 31 December of the 10th year following the year in which tax residence was transferred; this time limit does not apply if you have had the free use of the property since at least 1 January of the year preceding that of the sale. An owner who only has British nationality does not meet the nationality condition since the United Kingdom left the European Union. According to impots.gouv.fr, this exemption also does not apply to a property held through a company, such as an SCI.

For social contributions, a non-resident affiliated to the compulsory social security scheme of another European Economic Area country or Switzerland pays only the solidarity levy of 7.5 %, instead of 17.2 %. They must certify their situation on their honour and provide supporting documents if requested by the authorities.

Where the capital gain remains taxable, a tax representative must in principle be appointed, subject to exceptions provided for by law depending on your circumstances, the sale price or the exemption obtained.

Final taxation: what rates should you bear in mind?

Once the taxable net gain has been determined, after taking into account the applicable allowances, two main deductions generally apply:

• income tax at the rate of 19%;
• social security contributions at a rate of 17.2 %.

The social security contribution rate is limited to 7.5 %, subject to conditions, for a seller affiliated with the compulsory social security system of another European Economic Area country or Switzerland (see the section on non-residents).

According to the tax authorities, an additional tax may be added when the taxable capital gain exceeds €50,000 €. Its rate varies from 2 % to 6 %. It applies to high property capital gains and does not apply to exempt sales or transfers of building land.

You must therefore distinguish between the gross capital gain, the capital gain adjusted for allowable costs and increases, and then the net taxable capital gain, calculated separately for income tax and social security contributions since the allowances differ. Each of these two bases is subject to its own rate: 19 % for income tax, 17.2 % (or 7.5 % in the case described above) for social security contributions.

Who handles the formalities and how can you prepare properly for the sale?

The notary handling the sale carries out the tax formalities: dealings with the authorities, calculation of the taxable capital gain, preparation of the return and payment of the tax to the land registration service for the area where the property is located. You must then enter the necessary information on your tax return.

To prepare the sale of a second home, the most useful order is often as follows:

1. find the deed of purchase, inheritance or gift;
2. check the date on which ownership began;
3. gather supporting documents for costs, works and sale expenses;
4. examine possible exemptions ;
5. have the property's current value estimated in order to set the sale price.

A marketing valuation and a market-value appraisal do not serve the same purpose: the former is used to set an asking price, while the latter establishes the value of a property at a given date, for example for an inheritance, gift or ongoing division of assets.

For further information, you can consult the service-public.gouv.fr page on property capital gains and the practical guide from the tax authorities.

Frequently asked questions