Real estate capital gain: Should you sell before 2026 or endure perpetual taxation? Discover the true impact of the reform for families

As 2026 approaches, the tax reform concerning real estate capital gains creates an atmosphere of uncertainty among property owners, especially families owning second homes or rental properties. The crucial question arises: should one anticipate selling before the regime change, or accept a potential heavier taxation in the long term? This overhaul of exemption and taxation rules, passed as part of the Finance Bill, promises to disrupt traditional wealth management strategies. Between economic stakes, fiscal consequences, and strategies to adopt, the real impact for families requires thorough analysis and distancing from preconceived ideas.

Until now, the taxation system on real estate capital gains relied on a dual timing of exemption, differentiating income tax and social contributions, sometimes generating complexity and inequalities. By merging and simplifying these rules, the government aims to make the real estate market more dynamic, encourage selling properties after a shorter holding period, while ensuring better administrative clarity. But behind this ambition, it is the daily life of households that is profoundly impacted, notably regarding wealth management choices to adopt, tax declarations to anticipate, and the control of perpetual tax on potential capital gains.

Attention is particularly focused on families whose real estate assets often constitute one of the main financial pillars. Managing this real estate taxation can become an optimization lever but also a source of tension when the reform modifies the usual market contours. Sell property just before the entry into force or, on the contrary, keep it hoping for a more favorable evolution? This dilemma, fueled by a lack of knowledge of exemption schemes and reforms, imposes a new approach, mixing tax prudence, long-term wealth vision, and a fine understanding of real estate capital gains mechanisms.

Understanding the new real estate taxation regime: how the 2026 reform transforms real estate capital gains

The reform introduced in 2026 profoundly changes how real estate capital gains are calculated and taxed. The central element of this change lies in the overhaul of the exemption mechanism based on holding period, which was previously divided between income tax and social contributions. From now on, a single linear system will be applied, aimed at simplifying tax declaration and smoothing the sales cycles of real estate assets.

Until now, to benefit from a total exemption of tax on capital gains, one had to keep a property for up to 22 years for income tax and up to 30 years for social contributions. This disparity extended the necessary holding period and complicated the calculation during property sales. In the new tax framework, total exemption will be progressive at a rate of 5% per year from the first year of ownership, for a full exemption after 20 years, integrating both income tax and social contributions.

This change implies an important new perspective. While a property held for 10 years currently benefits from a partial and often less advantageous exemption, it will quickly become more interesting thanks to the linear exemption. For example, a property with a capital gain of €150,000 can see its taxable base reduced by 50% after 10 years, which was not the case before. This reform, through its clarity and unique calculation, eliminates grey areas in tax declaration, thus simplifying the work of taxpayers and industry professionals.

The reform nevertheless excludes the primary residence, which remains totally exempt from real estate capital gains tax. This fundamental point continues to offer families a major tax advantage when selling their main home. The properties concerned by this new taxation are mainly second homes, rental properties, building plots, and shares in real estate civil companies (SCI).

Comparative table of the exemption scheme before and after reform:

Holding period	Old regime (2025)	New regime (2026)
1 to 5 years	0% exemption	5% per year from the 1st year
6 to 21 years	6% income tax/year, 1.65% social contributions/year	5% per year from the 1st year
22 to 29 years	Total exemption income tax at 22 years, social contributions at 30 years	Total exemption at 20 years

The government also wants to use this reform to encourage property turnover, especially in tight areas where demand exceeds supply. By encouraging shorter holding periods for full exemption, the market could clear up, offering more opportunities to buyers while stimulating construction. However, this fiscal system overhaul calls for increased vigilance regarding family wealth management, who must now reassess their sales schedule and associated fiscal impact.

Fiscal and strategic impact: should you sell your property before 2026 to avoid perpetual taxation?

The heart of the debate around this reform is the fear, more or less founded, of a perpetual tax on real estate capital gains for those who keep their property for too long or cannot proceed with the sale before 2026. This idea of a “lifetime tax” finds its roots in the complexity of the current system, where partial taxation can extend over several decades.

The 2026 reform certainly simplifies the rules but does not eliminate taxation; it simply makes it faster and linear with the 5% per year exemption. Rather than being subject to a complex gradual taxation that is hard to differentiate, taxpayers will be able to clearly predict the amount of tax due based on the exact holding period. In the end, this can prove less penalizing than the old model, especially for sales made between 10 and 20 years of ownership.

To illustrate this, let’s take the example of a family owning an apartment bought for €200,000 and resold at €350,000 with a gross capital gain of €150,000. Under the current regime, if this family sells after 15 years, they will have to pay about €32,943 in total taxes. With the reform, this tax burden drops to nearly €13,575, a substantial net saving. Even for shorter durations, such as 8 years, the reform offers a net advantage by reducing the total tax by several thousand euros.

Here is a comparative table of the tax amounts payable depending on the holding period under the old and new regimes:

Holding period	Total tax in 2025 (old regime)	Total tax in 2027 (new regime)	Difference
8 years	€46,075	€32,580	-€13,495
15 years	€32,943	€13,575	-€19,368
21 years	€13,149	€1,810	-€11,339
25 years	€3,783	€0	-€3,783

Despite these encouraging figures, rigorous planning remains essential. It is not enough to mechanically wait for the reform’s entry into force to make the best move. If the local real estate market cools down or economic prospects change, falling sale prices could cancel out the benefits of the tax reform.

Consequences for families: wealth management and new fiscal challenges

Family property owners find themselves at the center of this tax reform, faced with a new environment to optimize their real estate assets. Wealth management becomes an exercise in balancing tax anticipation, market opportunities, and personal projects.

A second home, for instance, often represents a strong emotional asset, but also a tax burden when sold. The reform opens the door to more agile strategies: selling a property held for a decade becomes fiscally more attractive than before, which could push some families to rearrange their assets or finance other projects.

For rental investors, the reform constitutes a real revolution. While the previous system favored very long holding to amortize taxation, the new regime encourages more liquidity and turnover in real estate portfolios. An investor may be tempted to sell a property after 15 to 20 years to reinvest without facing heavy taxation. This movement could energize the rental market but also modify property values according to the responsiveness of owners.

Another major issue is the impact on estate transfer. Requests for exemption or optimization sometimes go through selling the property and donating the capital rather than through direct real estate transfer, often synonymous with complications and high fees. For families wishing to prepare inheritance, understanding and mastering these new fiscal parameters becomes indispensable.

List of main fiscal and patrimonial challenges for families in 2026:

• Reevaluation of property holding strategies
• Precise calculation of capital gains according to the new linear exemption regime
• Integration of deductible work to reduce the taxable base
• Anticipation of opportunities offered by specific exemptions and derogations
• Estate planning adjusted to new fiscal horizons
• Monitoring local market trends before putting properties up for sale

Complexity does not entirely disappear with the reform, far from it. Families will need to equip themselves with simulation tools and consult specialists to correctly assess their situation, optimize tax declarations, and avoid costly mistakes. This vigilance is necessary to prevent real estate taxation from becoming too heavy a burden over time.

Preserved fiscal levers in 2026: exemptions, abatements, and opportunities to know

Despite the profound modification of the exemption scale, several exemption schemes remain and are valuable wealth management tools to exploit. Understanding these levers is essential to avoid rushing into a non-optimized sale and to avoid certain pitfalls.

The best-known remains the primary residence exemption, which still fully applies. It is a major exception that allows families to protect this property title from any capital gains tax, provided that the dwelling is indeed their main home at the time of sale.

Other specific exemptions are also maintained:

• The sale of a property priced at or below €15,000 is exempt.
• Pensioners or holders of a disability card may benefit from an exemption subject to income conditions.
• The first sale of a dwelling other than the primary residence, under certain conditions related to prior non-ownership and capital destination, is exempt.

More innovative is the proposal of a new temporary exceptional abatement of 30% on certain sales, notably for building plots or properties to demolish in tight zones, if the buyer commits to building collective housing within a defined timeframe. This measure aims to stimulate construction and supply where demand is strong.

Deep knowledge of these schemes will allow families and investors to develop adapted strategies, combining sale, acquisition, and tax optimization. Only a fine mastery of these tools will avoid suffering the reform, but rather benefit from it and lighten the overall fiscal impact.

Practical advice to anticipate and manage the real estate capital gains reform

Faced with the transformed landscape of real estate taxation, active anticipation is essential. Any misstep in wealth management or tax declaration can be costly. Here are concrete paths to consider to master your case.

Before any decision, it is crucial to have a personalized simulation conducted by a notary or specialized advisor. Each situation presents particularities: acquisition date, amount invested in works, holding period, nature of the property… All these parameters influence the final tax. This fine analysis guides towards an anticipated or deferred sale depending on the combination of fiscal and market factors.

It is also important to carefully keep all invoices related to deductible works. Construction, extension, or improvement works (such as kitchen installation) will help reduce the taxable base and therefore lower the taxable capital gain. Note, however, that simple repairs or maintenance work are not eligible for these abatements.

The timing choice for sale must also take into account the local real estate market dynamics. A price drop or contraction in demand could make a sale before the reform more costly in terms of sale price, despite an apparent fiscal advantage. Macro and local economic analysis thus plays a key role to avoid sacrificing asset valuation.

List of key steps to follow to properly manage the reform:

1. Carry out a personalized tax simulation with an expert.
2. Identify and organize all deductible work invoices.
3. Monitor the local real estate market and interest rates.
4. Study applicable exemption schemes for your situation.
5. Plan a possible optimized estate transfer or donation.
6. Update your tax declaration rigorously to avoid errors.

This list, far from exhaustive, offers a methodical framework to master the reform. Families and investors who seize these tools and advice today will be better equipped to turn this fiscal turning point into a real opportunity, making real estate taxation a lever rather than a brake.