France property tax: non-residents avoid social charge rise

Non-residents outside Europe have been spared an increase in the social charges they pay on property capital gains, from 17.2% to 18.6%.

Avocat fiscaliste Laurent Gravelle, from Sophia-Antipolis (Alpes-Maritimes) reported to us that the authorities are now allowing non-residents to continue to pay at the previous, lower, rate, contrary to expectations among many property experts.

The feared rise related to the fact that the main CSG social charge – levied on many forms of income and helping to fund the social security system – has risen from 9.2% to 10.6% on some kinds of income.

This applies to bank interest or dividends from shares, for example, but the 2026 social security finance law contained rules exempting capital gains on real estate.

However, many experts read the wording of the law article on this exemption as relating only to capital gains of French residents.

This was felt by some to add insult to injury, as non-residents do not benefit from French social security.

In fact, due to the Dr Ruyter case in the European Court several years ago, non-residents who live in the EU/EEA and Switzerland do not pay CSG or the similar CRDS (0.5%) on their property capital gains, only 19%  capital gains tax plus another 7.5% social charge called prélèvement de solidarité (PDS) – a total of 26.5% combined tax and charges.

This compares to 19% + 7.5% (PDS) + 0.5% (CRDS) + 9.2% (CSG) = 36.2% tax and charges for residents in France, though main home sales are exempt from all of these.

Non-residents in the UK are treated as being similar to EU/EEA residents due to post-Brexit agreements on social security which are seen as comparable to EU coordination rules.

However, non-residents elsewhere, such as the US, do not benefit from the De Ruyter rules. Thus, it was thought that they were set to pay 19 + 0.5 + 10.6 + 7.5 – a total of 37.6%.

It is this that has now been proven to be a false alarm, Mr Gravelle told The Connexion.

He had previously heard of the potential complication, which had seemed to him unfair and illogical, and possibly an unintended consequence of the drafting of the law.

“It seems now to be admitted that it should remain at 17.2% of social charges, not 18.6%,"  he said.

The position has also now also been stated at point 10 in a social security official bulletin which says this interpretation is based on constitutional principles of equality.

As a reminder, while CSG is generally payable on second home sales, some non-residents benefit from exemption from CGT and social charges on sale of a former main home in France, under certain circumstances. 

• If the property owner moves elsewhere in the EU or to another state which has a mutual agreement with France on the fight against tax fraud and evasion (such as the UK and US) and the sale is at the latest by December 31 of the year after leaving France, and the property has not been rented out

• If a citizen of the EU leaves France, they can be exempt from up to €150,000 of net taxable capital gain for a period of 10 years for properties they cannot use (eg. because they are rented out) or indefinitely for properties they had use of personally at least since January 1 of the year of sale.