A developer wants your land? Capital gains tax can shrink by 60 to 85%. If you sign in time.
Do you own land in a town where housing is in short supply? If you sell it to a builder who undertakes to put up apartment buildings on it, capital gains tax can shrink by 60 to 85%. The advantage is real, but it follows strict rules and a deadline: the preliminary sale agreement must be signed by 31 December 2027 at the latest.
An exceptional allowance, on top of the holding period
When an individual sells land that is not their main residence, the capital gain is taxed at 19% income tax and 17.2% social charges, after allowances that increase with the number of years of ownership. Article 150 VE of the French General Tax Code adds an exceptional allowance, applied after these holding-period allowances, to both the income tax and the social charges.
Its rate depends on the location and on what the buyer is going to build:
The scheme covers building land, but also built properties intended to be demolished and rebuilt. It was extended by the 2026 finance act: the preliminary sale agreement must have been signed between 1 January 2024 and 31 December 2027, and the final sale completed by 31 December of the second year that follows at the latest. A preliminary agreement signed in November 2026 therefore leaves until the end of 2028 to sign the deed.
What the buyer must undertake to do
The seller's advantage depends entirely on the buyer's commitments, written into the deed of sale. In practice, the buyer is almost always a property developer or a social housing provider:
- Build apartment buildings. One or more new residential buildings, either newly built or after demolition. A buyer who wants to build their own detached house does not qualify for the allowance.
- Make use of the land. The project must reach at least 75% of the maximum building envelope allowed by the local plan.
- Finish within four years. The homes must be completed within four years of the purchase. Otherwise, it is the buyer who pays a fine of 10% of the price, not the seller.
One exclusion matters a great deal in families: the allowance does not apply if the land is sold to your spouse, civil partner, cohabiting partner, parents or children, or to a company in which one of them is a partner.
Between the first contact with a developer and the preliminary agreement, several months easily go by.
What it amounts to
Example with figures: land sold to a developer in 2027
A fictitious case. Land bought for €150,000 in 2015 is sold for €450,000 in 2027, after twelve years of ownership, to a developer who undertakes to build an apartment building. Statutory flat rate of 7.5% for purchase costs; no flat rate for works on land.
| Gross capital gain (€450,000 minus €161,250) | €288,750 |
| Tax and social charges, ordinary rules | about €75,700 |
| With the 60% allowance (high-demand area) | about €30,300 |
| With the 85% allowance (half social housing) | about €11,400 |
| Possible saving | €45,000 to €64,000 |
Excluding local or national taxes on land that has become buildable, which may be added depending on the town and the history of the land. The final calculation is the notary's.
The longer the ownership, the smaller the difference: after 22 years, income tax has already disappeared, and only the social charges benefit from the allowance. It is for land held between five and twenty years that the stakes are highest.
The timetable: 2027, perhaps 2029
As of 22 October 2026, the deadline remains 31 December 2027. On 16 October, MPs adopted, with the government's backing, an amendment extending the scheme by two years. But it is part of the first part of the 2027 budget, whose vote has been postponed to early November, before it goes to the Senate and a final vote expected in December. Nothing is settled.
The deadline seems comfortable; it is not. A developer does not sign a preliminary agreement without checking the local plan, the actual building potential, the utility connections, any soil pollution and the feasibility of their project. Then the price and the conditions precedent have to be negotiated, notably obtaining planning permission. Between the first contact and the signing of a preliminary agreement, several months easily go by. An owner who starts thinking about it in spring 2027 risks missing the window.
Pitfalls to avoid
- Believing that any land in a high-demand area qualifies. Without a commitment to build apartment buildings, there is no exceptional allowance: only the holding-period allowances apply.
- Overlooking the conditions precedent. If planning permission is refused or challenged, the sale may never happen. Their duration must remain compatible with the deadline for the deed.
- Dividing the land too quickly. Selling building plots to individuals can bring in more in some cases, but without this tax advantage. The two scenarios must be compared, after tax.
- Selling to a relative or to your own company. The family exclusion means losing the allowance.
Before any discussion with a buyer, check what your land really allows: see how to read the local plan in 6 steps, the signs that land is worth more than a standard sale and, if you are weighing up a division, the steps, timescales and costs of dividing land.
Our approach
We study land and properties with potential: what the local plan allows to be built, which builders may be interested, and what each sale scenario yields once the tax is paid. The tax calculation remains your notary's; our role is to find the right buyer, at the right price, within the deadlines. Have your land assessed.
Frequently asked questions
How do I know if my land is in a high-demand area?
The classification depends on the town (zones A bis, A and B1). The Housing Ministry's online simulator, your notary or the town hall can confirm it.
Does the allowance apply if I sell to an individual building their own house?
No. The buyer must undertake to build one or more apartment buildings, completed within four years.
What happens if the developer does not build?
It is the developer who pays a fine equal to 10% of the sale price. The seller's allowance is not called into question.
Do I need to have signed the deed before the end of 2027?
No: it is the preliminary sale agreement that must be signed by 31 December 2027 at the latest. The deed must follow by 31 December of the second year after that.
Will the scheme be extended to 2029?
Perhaps. MPs voted for it on 16 October 2026, but the 2027 budget has not been adopted. It is safer to plan around the end-2027 deadline.
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