Will I Pay Capital Gains on the Sale of My Overseas Home?

Usually, yes. The relief that protects a main home is the most valuable allowance in most property tax systems, and it generally does not travel to a second property. Once the home is also in another country, a second question arrives on top: which country taxes the gain, and does the other one tax it as well.

This guide covers the mechanics that decide the bill, then shows them at work in two real regimes — the United Kingdom's and France's — using the figures those governments currently publish, each dated and linked. Rates elsewhere differ and change, and an out-of-date rate is the one thing in an article like this that a reader would actually act on, so the mechanics are the part to carry to your own country.

The gain is not the price rise

The taxable gain is broadly the disposal proceeds minus your allowable costs, and "allowable costs" is a longer list than the purchase price alone.

Systems differ on what qualifies, but the categories commonly available include:

• The original purchase price
• Transfer tax, notary, legal and registry costs on acquisition
• Costs of sale, including agent commission and legal fees
• Capital improvements that enhanced the property, as distinct from repairs

That last distinction is the one that decides real money. A new kitchen replacing an old one may be a repair; an extension that did not exist before is usually an improvement. Repairs are generally not allowable against the gain, improvements generally are, and the line between them is drawn by the tax authority rather than by how much it cost you.

One further adjustment catches people who have let the property. Where a system has allowed depreciation or wear-and-tear relief against rental income, it commonly requires the base cost to be reduced by that relief on eventual sale — and in some systems by the relief you were entitled to claim whether or not you actually claimed it. If the place has ever been let, establish this before you model anything. The letting side is covered in our rental income tax guide.

Keep the invoices from day one

This is the single most valuable habit in this article, and it costs nothing.

Every claim you eventually make must be evidenced. Twenty years later, a decade of improvement work with no invoices is a deduction you cannot take, and the practical consequence is tax paid on money you actually spent. People routinely lose meaningful sums this way, not because they did not do the work but because they cannot prove it.

Open a folder on the day you complete. Put the completion statement in it, then every improvement invoice, every professional fee, and every relevant receipt as it happens. Keep it for as long as you own the property and for the retention period afterwards.

What the missing invoices actually cost

Invented numbers, used only for the arithmetic. No real rate or relief is implied.

Take a property bought for 400,000 and sold twenty years later for 700,000. The owner spent 90,000 on work over that period: an extension, a new roof, a rewire and a new kitchen.

With every invoice kept, and assuming the extension and the rewire qualify as improvements while the kitchen replacement and the roof repair do not, the allowable costs might be the 400,000 purchase, 20,000 of acquisition costs, 15,000 of selling costs, and say 55,000 of qualifying improvements. Total 490,000. Taxable gain: 210,000.

With no invoices, none of the 55,000 can be evidenced and none of it can be claimed. Allowable costs fall to 435,000. Taxable gain: 265,000.

The difference in the taxable gain is 55,000 — the exact amount of work that was genuinely done, genuinely paid for, and simply not provable. Whatever rate applies, the owner pays it on money they actually spent on the building. The work happened; only the paper was missing.

Two countries, one gain

On an overseas property the default position is that the country where the property sits taxes the gain, because that is where the asset is. Your country of residence may then tax the same gain as part of your worldwide income, and relief for the first tax against the second depends on the treaty between them.

That relief is rarely a clean cancellation. Treaties allocate taxing rights and then give credit, and a credit is capped at what your home country would have charged. If the property's country taxes at a higher effective rate than your own, the excess is generally not recoverable; if it taxes at a lower rate, you commonly top up to your home rate. Either way, the arithmetic is done on both returns and the timing rarely lines up. Our double taxation treaties guide sets out how the mechanism works.

There is a filing trap alongside it. Several countries require a disposal to be reported within weeks of completion, separately from and much sooner than the annual return, sometimes with the tax payable at the same time. Missing that is a penalty on a return you would have filed correctly anyway.

Two real regimes, as their governments publish them

The figures below were read on the official pages on 28 September 2026 and are listed under Sources. They show how the mechanics above look in practice; they are not a substitute for checking the rules for the tax year in which you actually sell.

The United Kingdom

• Main-home relief is narrow. GOV.UK describes the full relief as applying where you have one home and have lived in it as your main home for the whole time you owned it, and notes that a married couple or civil partners can count only one property as their main home at any one time. A second home is, by default, outside it.
• Rates. For gains made from 6 April 2026, GOV.UK gives Capital Gains Tax rates of 18% on gains falling within the basic-rate income tax band and 24% above it, with an annual exempt amount of £3,000 for the 2026 to 2027 tax year.
• The 60-day rule. Capital Gains Tax due on a sale of UK residential property must be reported and paid within 60 days of completion, and non-residents selling UK residential property are subject to the same 60-day window. The rule is specific to UK property; GOV.UK points other disposals to the normal Self Assessment route.

France

• Rates. Service-Public.fr, the French government's information site, gives the tax on a gain on French property as 19% income tax plus 17.2% social charges; impots.gouv.fr confirms the 19% rate for non-resident sellers and notes a reduced social-charge position for sellers affiliated to a social security scheme in the EEA or Switzerland.
• Holding-period relief. After six years of ownership the taxable gain is progressively reduced, becoming fully exempt from income tax after 22 years and from social charges after 30 years (Service-Public.fr). This is the kind of rule mentioned below under timing: a sale in year 21 and a sale in year 22 can produce very different bills.
• Collection at the sale. The notary handling the sale calculates the taxable gain and the tax, prepares the declaration and pays the tax as part of the transaction (Service-Public.fr), which is why a French sale needs the base-cost evidence in order before completion rather than at the next tax return. Service-Public.fr also describes a flat-rate allowance of 7.5% of the purchase price for acquisition costs, as an alternative to the actual figures.

A UK resident selling a French home meets both regimes at once: France taxes the gain where the property sits, the UK may tax it again as a gain of a UK resident, and the treaty between them decides how the French tax is credited. That is the two-country problem above, with real names.

Currency turns a flat market into a taxable gain

On a cross-border sale the gain may be computed in the currency of the country doing the taxing, using the exchange rates at acquisition and at disposal.

Again, invented figures. Assume you are resident in one country and the property sits in another with a different currency.

You buy for 500,000 local units when the exchange rate is 1.00 to your home currency, so the purchase cost you 500,000 at home. Twenty years later you sell for exactly 500,000 local units — a completely flat market, no gain in local terms.

But the rate has moved to 1.20. The sale converts to 600,000 in your home currency. If your country of residence computes the gain in its own currency, you have a 100,000 gain and a bill on it, despite having received back precisely what you put in.

The reverse happens too, and can hand you a loss on a property whose local price rose. Neither outcome is avoidable. Both are foreseeable, and a cross-border disposal should be modelled in both currencies before it is agreed rather than after.

Note the second-order effect: a mortgage in the property's currency moves the other way, and in some systems the loan itself can produce a separate taxable gain when repaid. If the purchase was financed locally, ask about it specifically.

Timing and residence status frequently matter

Several systems apply relief that depends on how long you held the property, on how long it was your main residence, or on your residence status at the point of disposal.

Where such rules exist they can make the difference between a substantial bill and a small one, and they turn on dates. This is a case where a conversation with an adviser before you agree a sale is worth considerably more than the same conversation afterwards — after completion the dates are fixed and the planning options are gone.

Residence status is the sharpest edge here. Some systems tax a departing resident on unrealised gains, some tax a former resident who sells within a defined window after leaving, and some treat a non-resident seller differently on the same property. If a move and a sale are both in prospect, their order can matter more than their timing. How residence itself is decided, and why day counts alone rarely settle it, is explained in the 183-day rule is not the rule.

Inherited and gifted property has its own rules

If you did not buy the property, your acquisition cost is not obvious, and systems handle it differently — some substitute the market value at the date of death or gift, some carry over the original owner's cost, some tax the transfer itself at the time.

If you have inherited property or been given it, establish your base cost early rather than at the point of sale. The information needed — a probate valuation, the date, the original owner's records — is far easier to obtain near the event than years later, and it directly determines the eventual bill. The succession dimension is covered in inheritance tax on property abroad.

The mistakes that cost the most

What to ask your adviser

• Does main-residence relief apply to this property at all, and if not, has it ever?
• What exactly counts as an allowable improvement here, and what evidence will be required?
• Has any letting relief or depreciation reduced my base cost, whether or not I claimed it?
• Is there a holding-period relief, and what dates would I need to hit?
• Does my residence status at the point of disposal change the outcome, and would moving first help or hurt?
• In which currency is the gain computed, and using which exchange rates?
• Does my foreign-currency mortgage create a separate gain on repayment?
• Will the property's country and my country of residence both tax this, and how is relief given?
• If the property was inherited or gifted, what is my base cost and how is it evidenced?
• Are there reporting deadlines after completion that are shorter than the annual return?

The short version

Assume a second home carries tax on the gain. Keep every invoice from the first day. Model the sale in both currencies if it is cross-border. Check whether a short filing deadline applies after completion. Take advice before you agree the sale, not after.

The gain is calculated once and the arithmetic is unforgiving, but almost all of it is determined by paperwork you either kept or did not. The wider ownership cost picture sits in our property tax guide, and the structures people use to hold cross-border property in tax-efficient property ownership. Every tax guide we publish is listed under Tax & Structure.

General information, not tax advice. Capital gains rules, reliefs, holding periods, filing deadlines and allowable costs differ by jurisdiction and change. The only real rates in this article are the UK and French figures in the section on two real regimes (repeated in the questions below), each read on the official page on the date shown in the sources; everything else is mechanism. The worked examples use invented figures to show a mechanism and are not projections. Take professional advice in every relevant country before agreeing a disposal.

Frequently asked questions

Do you pay capital gains tax on a second home?

Usually, yes. Main-residence relief, the most valuable allowance in most systems, generally does not extend to a second property. If the home is in another country, that country normally taxes the gain where the property sits and your country of residence may tax it as well.

What is the UK capital gains tax rate on a second home?

For gains made from 6 April 2026, GOV.UK gives rates of 18% on gains within the basic-rate income tax band and 24% above it, with an annual exempt amount of £3,000 for the 2026 to 2027 tax year. Check the rates for the tax year in which you actually sell.

How long do you have to report capital gains on UK property?

Capital Gains Tax due on a sale of UK residential property must be reported and paid within 60 days of completion, and the same window applies to non-residents selling UK residential property.

How is capital gains tax worked out on a second home in France?

The gain is taxed at 19% income tax plus 17.2% social charges, reduced after six years of ownership and fully exempt from income tax after 22 years and from social charges after 30 years. The notary calculates and pays the tax as part of the sale, so your base-cost evidence must be ready before completion.

Can you be taxed twice on the sale of a home abroad?

Both countries can tax the same gain, and the treaty between them decides how relief is given. Relief is usually a credit capped at what your home country would have charged, so if the property's country taxes more heavily the excess is generally lost, and if it taxes less you commonly pay the difference at home.