You bought a one-bedroom flat in Lyon, Bordeaux or the Paris suburbs before Brexit, furnished it, and let it year after year as a loueur en meublé non professionnel — a non-professional furnished landlord, the LMNP status that thousands of British owners use. Now you are selling: perhaps you are tired of managing from Manchester or Edinburgh, perhaps the new tourist-registration rules have taken the shine off short lets, or perhaps you simply want to release the equity. The buyer’s notaire sends you a draft capital-gains computation, and the numbers look alarming. Which country actually has the right to tax the gain, will France treat you as a private seller or as a business, what happens to all the depreciation you deducted under the régime réel, and what can you do if the bill is wrong? This article answers those four questions in order. It explains first why France taxes the sale before Britain does and why your furnished flat almost never qualifies as a résidence principale, then the test that decides whether your gain falls under the private capital-gains rules or the professional business-gains rules with the Article 151 septies exemption, then how the taxable gain is built, reduced and paid through the notaire, and finally how to challenge each link in that chain. All French terms are explained as they appear: plus-value means capital gain, notaire is the French conveyancing official who collects the tax, abattement is a statutory percentage reduction, régime réel is the actual-accounts tax regime, and foyer fiscal is the household tax unit. The law is stated as verified on 7 October 2026, with the official texts and a recent Conseil d’État decision quoted in support.

I. France taxes the sale first, but your LMNP history decides which regime applies

A. Why France has the first taxing right over the gain and why the main-home exemption rarely helps a furnished landlord

The starting point surprises many British sellers: although you live in the United Kingdom, the gain on your French flat is taxable in France first. Article 4 A of the French General Tax Code (code général des impôts) provides that “Celles dont le domicile fiscal est situé hors de France sont passibles de cet impôt en raison de leurs seuls revenus de source française” — persons whose tax domicile is outside France are liable to French income tax on their French-source income, which includes gains on French property. The official text is in Article 4 A of the General Tax Code. The France–United Kingdom double tax treaty of 19 June 2008 preserves this French taxing right over French immovable property and its rental income, so France taxes both the rental years and the sale year first, and the treaty then relieves the resulting double taxation on the British side. On the British side, the practical consequence is administrative: British residents who owe tax on overseas property normally report it through a Self Assessment return, as explained in the official GOV.UK guidance on foreign income, which states that British residents who owe tax on overseas property normally report it through a Self Assessment return. Declare the French gain to HM Revenue and Customs, claim Foreign Tax Credit Relief there, and keep the French assessment as proof of the tax already borne.

Within France, the default regime for a private individual selling bricks and mortar is set by Article 150 U of the General Tax Code (code général des impôts). It charges gains on the “cession à titre onéreux de biens immobiliers bâtis ou non bâtis” to income tax under the private capital-gains rules. In other words, gains realised by individuals on the sale for consideration of built or unbuilt property fall within income tax under the private capital-gains rules. The full text is available in Article 150 U of the General Tax Code. That same article contains the famous main-home exemption: the rules do not apply to buildings “Qui constituent la résidence principale du cédant au jour de la cession” — property constituting the seller’s main home on the day of sale. A furnished flat you have let to tenants for years is, by definition, not your main home on completion day, so this total exemption is normally out of reach for the LMNP seller. Two narrow doors sometimes remain open and deserve a check before they are dismissed. The first-cession relief exempts the gain on a first sale of a dwelling other than the main home where the seller has not owned a main home for four years and reinvests the price in a main home within twenty-four months. The retirement-home case covers a former main home sold while the owner lives in care. Both are fenced with conditions, and both are lost if the reinvestment or residence test fails, so verify them against the article text rather than assuming they apply.

Your residence position then fixes how France collects the tax. If you are still French-resident for tax purposes, the gain joins your French income tax with social levies on top. If you live in Britain, Article 244 bis A of the General Tax Code imposes a withholding-style levy (prélèvement) on the gains of non-residents, and its rate paragraph states that “les personnes physiques, les associés personnes physiques de sociétés, groupements ou organismes dont les bénéfices sont imposés au nom des associés et les porteurs de parts, personnes physiques, de fonds de placement immobilier mentionnés à l’article 239 nonies sont soumis au prélèvement au taux de 19 %.” Individual non-resident sellers therefore suffer a 19 per cent levy on the taxable gain, before social levies, as set out in Article 244 bis A of the General Tax Code. Ask the notaire at the compromis stage — the preliminary sale agreement — whether a tax representative (représentant fiscal) is required for your file, because accredited representation is compulsory for some non-resident sellers and missing it delays completion. Finally, remember that the letting years leave a trace on the year of sale: a flat that was your French second home remained liable for the taxe d’habitation sur les résidences secondaires, since “La taxe d’habitation sur les résidences secondaires est due pour tous les locaux meublés conformément à leur destination d’habitation autre qu’à titre principal,” in the words of Article 1407 of the General Tax Code. Unpaid housing-tax balances surface at sale time through the notaire’s searches, so clear them before completion rather than discovering them in the completion statement.

B. Non-professional or professional landlord on the day of sale: the test that moves your gain from private rules to business rules

Everything that follows depends on one classification: were you a loueur en meublé non professionnel (LMNP) or a loueur en meublé professionnel (LMP) — a professional furnished landlord? Your rents were commercial profits in both cases. Article 34 of the General Tax Code states that “Sont considérés comme bénéfices industriels et commerciaux, pour l’application de l’impôt sur le revenu, les bénéfices réalisés par des personnes physiques et provenant de l’exercice d’une profession commerciale, industrielle ou artisanale” as confirmed by Article 34 of the General Tax Code. Furnished letting is a commercial activity for tax purposes, which is why you filed in the BIC (bénéfices industriels et commerciaux) category rather than the revenus fonciers category used for unfurnished lettings — a distinction explained in our guide to unfurnished rental taxation for British owners. But the sale of the walls follows a fork in the road. The non-professional landlord sells under the private capital-gains rules of Articles 150 U to 150 VH, with holding-period relief and no recapture of past depreciation. The professional landlord sells under the business-asset rules, where depreciation deducted during the letting years is partly recaptured, subject to a valuable exemption examined below. The boundary between the two is drawn by Article 155, IV of the General Tax Code, set out in Article 155 of the General Tax Code.

The professional test has two cumulative limbs for a French-resident household: annual receipts from the furnished letting activity, across the whole foyer fiscal, must exceed 23,000 euros, and those receipts must also exceed the household’s other taxed income in the listed categories — salaries, non-letting commercial profits, farm profits, non-commercial profits and managers’ earnings. The statute phrases the first limb in Article 155 of the General Tax Code as follows: “Les recettes annuelles retirées de cette activité par l’ensemble des membres du foyer fiscal” must exceed 23,000 euros. Many British files fail the second limb without realising it: a couple with one modest furnished studio in Nice and two full British-sourced salaries routed through the French return will normally stay non-professional, because the salaries dwarf the rents. For owners who are not French-resident, the comparison is adapted: “lorsque le contribuable n’a pas sa résidence fiscale en France”, the same article substitutes a comparison against equivalent income bearing a similar income tax in the owner’s State of residence. A Manchester-based owner therefore compares the French rents against equivalent British-taxed income of the same nature, not against worldwide income at large. Work through both limbs with the actual household figures before accepting any classification the notaire or the tax office proposes.

The Conseil d’État confirmed the practical consequence of staying on the non-professional side in a decision every furnished landlord should know. In Conseil d’État, 3rd chamber, 13 November 2020, No 437433, published at Conseil d’État No 437433 on Légifrance, the court recalled that “Les articles 150 U à 150 VH sont applicables aux plus-values réalisées lors de la cession de locaux d’habitation meublés ou destinés à être loués meublés et faisant l’objet d’une location directe ou indirecte lorsque cette activité n’est pas exercée à titre professionnel.” A non-professional sale therefore enjoys the private regime — holding-period abatements, no depreciation recapture — even though the rents were taxed as commercial profits. The same decision shows how fiercely the administration disputes professional status, since the taxpayer there fought over a few days of apportioned rent at year-end to meet a threshold. If your receipts hover near 23,000 euros, reconstruct each year’s rents from bank statements and leases, check how part-year lettings were annualised, and confirm whose receipts count within the foyer fiscal. Households with an SCI (société civile immobilière, the French property-holding company) or with several flats must aggregate correctly rather than testing each property in isolation.

The professional side is not the disaster it first appears, because Article 151 septies of the General Tax Code offers an exit exemption for business gains. The article opens by stating that the article covers activities “exercées à titre professionnel”, and grants exemption “à condition que l’activité ait été exercée pendant au moins cinq ans,” as set out in Article 151 septies of the General Tax Code. In outline, gains on business assets are fully exempt below an annual-receipts ceiling and partially exempt in a band above it, once the five-year condition is met. A British owner who crossed into professional status late — for example after adding a second studio — may still shelter the whole gain if the activity is old enough and receipts stay modest. Conversely, a recently professional landlord with high turnover faces the full business-gains computation, including the recapture of depreciation as short-term gain. Map your year-by-year status before the sale: the regime of the gain follows the nature of the activity, and a single year’s crossing can change the answer.

II. Building the taxable gain correctly and challenging each link when it is wrong

A. From sale price to tax paid: acquisition cost, holding relief, the notaire’s role and the return you still must file

The computation starts with the gross gain: sale price minus acquisition cost. The sale price is the acte price plus any charges the buyer bears for you, minus genuine selling costs such as agent’s commission evidenced by invoice. The acquisition cost is the original purchase price plus purchase expenses — registration duties and notaire fees — taken either at their proven amount or as a 7.5 per cent flat allowance on the purchase price, plus documented improvement works. The official service-public guide to private capital gains allows purchase expenses, covering registration duties and notaire fees, at their proven amount or as a 7.5 per cent flat allowance on the purchase price. Improvement works count only with invoices from professionals; your own weekends of painting from B and Q receipts do not. Loan interest, by contrast, never joins the acquisition cost — it was deductible year by year against the rents instead. British sellers should gather the original acte d’achat (purchase deed), the notaire’s fee statement, every artisan invoice with bank proof of payment, and the planning permissions where works required them. A file without invoices is taxed on a gain the seller cannot shrink.

The gross gain is then reduced by holding-period abatements (abattements pour durée de détention), which run at different speeds for income tax and social levies. The official scale grants nothing for the first five years, then 6 per cent per year for income tax from year six, with full income-tax exemption after twenty-two years of ownership, while social levies fade more slowly toward full exemption after thirty years. The service-public guide illustrates the mechanism with a ten-year holding relieved at 6 per cent a year from the sixth to the tenth year, or 30 per cent in total. Take a concrete British file. You bought in 2014 for 210,000 euros, sell in 2026 for 310,000 euros, add 15,750 euros of flat-rate purchase costs and 20,000 euros of invoiced works: the gross gain is 64,250 euros. After twelve years of ownership, income-tax relief runs at 6 per cent for seven years, or 42 per cent, leaving about 37,265 euros taxable to income tax — 19 per cent for our Manchester non-resident, or roughly 7,080 euros under the Article 244 bis A levy. Social levies apply to a less reduced base and are charged at the statutory rate, which is why the social-levy line on the notaire’s computation often exceeds the income-tax line on medium holding periods. Run both bases yourself before completion; the notaire’s draft is a proposal, not a judgment.

Payment and paperwork flow through the notaire, but the seller’s own return is not thereby finished. Under the official conveyancing procedure, the sale notaire handles the steps with the tax authority — computing the taxable gain and the tax due, preparing the return, and paying the capital-gains tax to the land-registration office of the property’s location. The tax is therefore computed, declared on form 2048-IMM and paid to the land-registration office of the property’s location at completion, out of the price. Yet the seller must still report the transaction on the annual income-tax return, because “toute personne imposable audit impôt est tenue de souscrire et de faire parvenir à l’administration une déclaration détaillée de ses revenus et bénéfices,” in the words of Article 170 of the General Tax Code. The return must show the gain declared by the notaire and, where relevant, any exempted amount. Social levies on the gain follow the contribution on patrimonial income: Article L. 136-6 of the Social Security Code reaches “De tous revenus qui entrent dans la catégorie des bénéfices industriels et commerciaux”, except those already bearing the working-income contribution, per Article L. 136-6 of the Social Security Code. Owners affiliated to another social-security system under the European coordination rules may escape part of these levies — the article expressly excludes persons covered by Regulation (EC) No 883/2004 who are not borne by a French compulsory scheme — so attach your S1 or A1 certificate to the file where applicable rather than paying first and arguing later.

Two letting-regime reminders belong in every sale computation. First, the micro-BIC simplified regime you may have used during the letting years has no bearing on the sale computation itself, but it explains why some sellers misunderstand their position: micro-BIC applies up to “2° 83 600 € s’il s’agit d’autres entreprises,” with “d’un abattement de 50 % pour le chiffre d’affaires provenant d’activités de la catégorie mentionnée au 2°” while tourist-furnished lettings fall under a specific “1° bis 15 000 €” threshold with “d’un abattement de 30 % pour le chiffre d’affaires provenant d’activités de la catégorie mentionnée au 1° bis” all set by Article 50-0 of the General Tax Code. Those abatements deemed depreciation taken into account on a straight-line basis, which tempts sellers to fear recapture — but for the non-professional seller the gain stays under Articles 150 U to 150 VH and no recapture applies. Second, the general deductibility rule that governed your régime réel years — “Le bénéfice net est établi sous déduction de toutes charges,” per Article 39 of the General Tax Code — stops at the sale: charges deducted against rents cannot be deducted again from the gain, and works already deducted as repairs cannot be added to the acquisition cost. Double-counting in either direction is the commonest reassessment trigger in LMNP-sale files. For wider context on Paris property work, our real estate lawyers in Paris advise on both the letting and the exit.

B. Challenging the bill: reclassify, recompute, reclaim and coordinate with the British return

Challenge the classification first, because it changes everything downstream. If the administration treats you as professional, demand the year-by-year demonstration of both limbs of the Article 155 test: receipts above 23,000 euros and receipts exceeding the comparable income. Typical errors include counting another household member’s unrelated income, forgetting the non-resident comparison rule, annualising a part-year letting incorrectly, or attributing a spouse’s separate property rents to your foyer fiscal. If you are treated as non-professional but believe five years of professional activity open the Article 151 septies exemption, assemble the registration history, the annual returns and the receipts tables proving the duration and the ceiling. The Conseil d’État decision No 437433 above is your template: the dispute there turned on days of rent at year-end, which shows that thresholds are litigated euro by euro and that the administration’s arithmetic must be verified, not trusted. Put your counter-computation in writing to the tax office (service des impôts) with leases, bank statements and returns attached, and keep proof of dispatch.

Recompute the gain independently, because notaire drafts are occasionally wrong in the seller’s disfavour. Check the completion date that starts the holding period — the acquisition date or the completion date for off-plan purchases — since one year can move the abatement band. Verify that the 7.5 per cent purchase-cost allowance was compared with actual costs and the better option chosen. Confirm that only invoiced improvement works, not repairs already deducted against rents, increased the acquisition cost. Re-run the two abatement scales separately for income tax and social levies rather than applying a single blended percentage. For non-residents, confirm the 19 per cent levy base and the social-levy position, including any European-regulation exemption supported by your S1 or A1. Where the notaire has already paid an excessive amount to the publicité foncière, the overpayment is recovered through a formal claim (réclamation contentieuse) to the tax authority, followed by appeal to the administrative court if the claim is rejected expressly or by silence. Time limits are short and run from the assessment or the payment, so diary them on completion day and instruct promptly rather than waiting for the following year’s return.

Coordinate the French outcome with the British return so the same euro is not taxed twice without relief. France taxes first under domestic law as preserved by the treaty; the United Kingdom then taxes its residents on worldwide gains with relief for the French tax under the treaty’s double-taxation relief rules. Report the sale on your Self Assessment return, convert euros to sterling using HM Revenue and Customs’ approved rates for the relevant dates, attach the French 2048-IMM and the completion statement, and claim the treaty credit for the French income tax and, so far as British rules allow, the French social levies. Keep the two computations reconcilable: acquisition cost, sale price and dates should match in both currencies, because mismatched figures invite enquiry on both sides of the Channel. If the French claim succeeds after you have filed in Britain, amend the British return to reflect the reduced French tax and the adjusted credit. Finally, treat penalties as a separate battle: late-payment surcharges and reassessment penalties can themselves be challenged for proportionality and for the taxpayer’s good faith, particularly where the file shows invoices kept, returns filed and advice sought. A clean documentary record — purchase deed, works invoices, leases, BIC returns, S1 or A1, notaire drafts and correspondence — is what turns a challenge from an argument into a refund.

Conclusion

Selling a French furnished flat as a British owner is a three-layer exercise: France taxes the gain first under the treaty, the LMNP or LMP classification selects the private or professional computation, and the notaire collects on figures the seller must still verify and report. The non-professional seller keeps the private capital-gains regime with holding-period relief and no depreciation recapture, as the Conseil d’État confirmed; the professional seller faces business-gains mechanics but may escape them through the five-year Article 151 septies exemption. Non-residents suffer the 19 per cent levy with social levies on top, subject to European-regulation exemptions where an S1 or A1 applies. Recompute the acquisition cost, the works, the two abatement scales and the status test before completion, report the gain in both countries, and challenge classification, arithmetic and penalties in that order. Handled this way, the sale closes the LMNP chapter cleanly instead of opening a reassessment file.