Is Capital Gains Tax levied on land in France?

Reader Question: I want to sell a plot of building land. How is capital gains tax worked out on this?

Depending on the circumstances, there can be a substantial taxable capital gain in the case of building land, especially where, due to changes in the local planning zones (plan local d’urbanisme) an agricultural area is now deemed constructible (suitable for building). In the latter case the increase in price usually makes up for the tax.

In general, a capital gain on land is subject to the same levies as sales of built property, including 19% of tax and 17.2% of social charges.

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As with built property, the taxable gain is subject to progressive reductions based on how long you have owned the land, up to exemption from tax after 22 full years of ownership and after 30 years for social charges.

There is, however, nothing to pay in the case of sales for €15,000 or less.

As with other property capital gains, you can add certain costs to the acquisition price and deduct others from the sale value. For example, money spent connecting the land up to utilities – called viabilisation – is deductible.

An additional deduction at 60% exists in zones under housing pressure if the purchaser agrees to build flats within four years (85% if half or more will be for social housing).

Note that an additional national tax is payable where someone sells for 10 times or more the original cost due to the reclassification of their land (a further local tax also applies in certain areas).

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