Big changes could be coming to the French real estate market in 2026, as an amendment adopted by the Finance Committee of the National Assembly threatens to end the long-standing total capital gains tax exemption on the sale of primary residences. If this new measure eventually makes its way into law, selling your main home could soon be a more complicated—and maybe costlier—affair.
Current Law: Tax-Free Gains for Main Residence Sales
Up until now, homeowners in France have enjoyed a significant benefit: selling your main residence is exempt from capital gains tax, no matter how long you’ve lived there. Whether you spent two years or two decades in your home, any profit from the sale goes entirely into your pocket.
What Might Change in 2026?
The proposed amendment to the 2026 Finance Bill would turn the tables for future sellers. Under this new rule, to qualify for tax exemption, you’d need to have occupied the property as your main residence for at least five years prior to selling. In short, selling “too quickly” could subject your profit to capital gains tax.
There are a few exceptions. Tax exemption would still kick in if:
- You sell to buy another main residence
- You can justify a compelling reason (such as health issues, family changes, or job transfers)
Why This Change? Tackling “Speculative Tumbling”
This proposed tax is aimed squarely at curbing real estate speculation, especially in high-pressure markets like the Basque Country. Lawmakers have seen people buying in hot areas, quickly declaring the property as their main home, and then selling for huge, tax-free profits. The amendment’s backers hope it will slow down this kind of “speculative tumbling” and reduce price booms that put housing out of reach for many.
Concerns About Impact on Ordinary Homeowners
Not everyone is convinced. Critics point out that the amendment may also penalize “ordinary” homeowners who need to sell sooner because of life events—work relocation, a family crisis, or health emergencies. The text leaves it to the administration to assess “compelling reasons,” opening the door to uncertainty and possible legal grey areas.
What’s Next for the New Rule?
Importantly, this measure has not become law yet. It’s just an amendment at this stage, still subject to debate, modification, and integration into the final 2026 budget. A similar idea was floated last year but ultimately rejected by the government.
Key Takeaway
If you’re considering selling your main residence in France in the next few years, keep a close eye on this proposal. For now, nothing changes—but come 2026, the process may be very different. Stay informed to avoid surprises, and consult a real estate or tax professional when the time comes.
