Exemption from capital gains tax on the sale of a home to purchase a primary residence: pay attention to the dates of purchase and listing

A taxpayer was subject to a tax audit regarding the capital gain realized from the sale of an apartment.

The taxpayer had considered this capital gain to be tax-exempt because she believed she was eligible for the exemption when selling a home in order to use the proceeds to purchase her primary residence.

The reassessment was challenged all the way to the Administrative Court of Appeals.

The tax authority will then note that the apartment was sold in March 2017, even though the taxpayer had purchased her primary residence in October 2016.

The Court therefore held that the condition set forth in the statute—namely, that to qualify for the exemption, the taxpayer must not have owned his or her primary residence during the four years preceding the sale—had not been met.

It therefore ruled that the taxpayer was not eligible for the exemption, even though she did not move into the home she purchased in October 2017 until the summer of 2017, following renovation work.

The Court will further rule that the administrative grace period applicable in the case of construction work or that applicable in the case of a bridge loan does not apply.

With regard to this last exemption, the Court notes that it requires taxpayers to have put the property up for sale prior to the purchase of their primary residence.

In this specific case, the taxpayer put the property up for sale—on which she realized a capital gain—in November 2016, that is, after she had acquired her primary residence in October of the same year, according to the Court. The Court held that even if steps to put the property up for sale had indeed been taken prior to November, they did not constitute an actual listing of the property.

The Court therefore finds that the exemption from capital gains tax on real estate did not apply and upholds the tax assessment.

CAA Versailles, April 9, 2026, No. 24VE00924

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