Real estate capital gains: income tax exemption after 22 years of ownership and exceptional 25% allowance

The 2014 Finance Act changed the holding-period allowance for capital gains on the sale of property other than building land. For income tax, it was raised to 6% a year from the sixth to the twenty-first year and 4% in the twenty-second, giving full exemption after 22 years instead of 30. For social levies, a separate allowance (1.65% a year from the sixth to the twenty-first year, 1.60% in the twenty-second, 9% thereafter) gives exemption after 30 years. An exceptional 25% allowance applied to sales between 1 September 2013 and 31 August 2014, extended to 2016 for certain demolition-reconstruction operations in high-demand areas. The rules apply to sales from 1 September 2013.