French property taxes
When buying a property in France, there are several taxes and fees you need to be aware of. On top of property purchase taxes, there are also ongoing taxes that homeowners in France may be subject to.
Typically, buyers should account an extra 10% for necessary buying costs on top of the property purchase price. This 10% includes notary fees, personal taxes, wealth tax (if applicable) and property taxes.
Property purchase taxes are calculated and collected by the notaries, who will work out what property taxes are due on the property and take all of this into account on completion of sale. Once it’s done, they will inform the tax office who, in turn, will attribute the taxes to the new owner.
Notary fees
Notaries in France play a key role in property transactions. They act as neutral legal experts and are appointed by the Minister of Justice to ensure the legality and validity of the transaction, draft and authenticate contracts, collect taxes and oversee the transfer of property ownership.
Notary fees in France are paid by the buyer and the rates are set by the government. These rates are non-negotiable. The amount you pay is worked out based on the cadastral value of the property you buy. It’s best to budget between 7-10% of the property price, but bear in mind that this includes tax – it does not all go to the notary.
If you’re buying a new-build property, the notary fees drop to 2-3%. This fee covers the notary costs and also includes the equivalent of stamp duty in France, droit de mutation.
However, new build property does attract VAT of 20%, but this should be included in the advertised price as TTC (Toutes Taxes Comprises).
Ongoing property taxes in France
There are two main types of French property tax buyers should be aware of. They are Taxe Foncière and Taxe d’Habitation.
Taxe Foncière
Taxe Foncière is an annual property tax, payable in October each year, for all owners of French property. This tax is paid by the person named on the titled deed as of 1 January each year, regardless of whether they live there or not. This tax applies to all residential, commercial, and industrial properties.
Taxe foncière is calculated on the location of your property, its plot, size and condition. The amount you pay varies as it is dictated and collected by local councils across France. The income generated goes towards local services, within both the commune and department. This charge may also include fees for waste disposal, depending on where the property is located. After paying the first demand in full (often up to nearly a year after purchase), you can arrange with your local tax office to pay this charge monthly by direct debit with no additional interest charges.
Late payment can cause a penalty increase of 15%. It is important to let the tax offices know as soon as you purchase a French property, but your notary will usually do this for you.
Taxe d’habitation
Since 1 January, 2023, the housing tax (taxe d’habitation) on primary residences in France has been abolished for all taxpayers in France. However, it has been maintained on second homes and related structures (garages and outbuildings). Owners also have a new obligation to report second homes in France.
Taxe d’habitation is an annual residence tax for furnished dwellings and their outbuildings that’s payable by whoever is physically living within a property as of 1 January each year. For those who rent out their properties then the occupier is liable for this French property tax, not the owner.
Payments are made in November.
The calculation of the Taxe d’habitation is more complicated than the taxe fonciére. The calculation is based on the cadastral rental value of the dwelling and its outbuildings, applying the rates voted by the local authorities. These rates vary according to your municipality.
Taxe d’habitation assumes that a property is habitable. While it is possible to get an exemption should your property not be in a liveable condition, it’s an arduous process that needs to be verified by local town hall officials. The property must truly be deemed uninhabitable as opposed to simply unoccupied. For more information, contact the local tax office.
Personal taxes
There are a few instances that make you a tax resident in France. For example, if:
- You spend 183 days or more in France.
- Your primary residence is in France.
- Your assets are primarily located in France.
- Your principal employment is in France.
- You spend more time in France than in any other country during the tax year.
If you are still unsure of whether you are a tax resident in France, speak to a tax specialist.
When you start living in France or spend more than 183 days there, you must register as a tax resident. If you are submitting a visa application to live in France, your lawyer will often do this on your behalf. Should you fail to register with the French authorities, the tax inspector will issue penalties, fines and interest charges.
There are three main types of personal taxes in France:
- French income tax (impôt sur le revenue)
- Social security contributions
- Tax on goods and services (taxe sur la valeur ajoutée (TVA) or VAT equivalent, in France)
French income tax (impôt sur le revenue)
Income tax in France is payable per individual against income earned in the previous year, declared in the current year. For example, if it’s 2025, you pay income tax on your 2024 earnings.
Since January 2019, French income tax falls under a banded PAYE system. Income tax is assessed on a household basis, and you should consult a tax advisor familiar with the French taxation system to help you calculate your specific tax liabilities.
As a tax resident in France, you are required to submit a personal income tax declaration (known as Impôt sur le revenue), regardless of your employment status. This applies to both French nationals and foreign residents. This tax regularises your financial personal situation based on the income of your whole household, including worldwide income.
If you live abroad but rent out your property in France, you are also subject to l’Impôt sur le revenue, meaning you must submit a personal income tax declaration to the authorities.
The below table shows income tax rates payable per individual against income earning n 2023, declared in 2022. [i]
| Income band from | Income band to | Tax rate | Tax on band | Cumulative tax |
| €0 | €10,777 | 0% | €0 | €0 |
| €10,778 | €27,478 | 11% | €1,837.11 | €1,837.11 |
| €27,479 | €78,570 | 30% | €15,327.60 | €17,164.71 |
| €78,571 | €168,994 | 41% | €37,073.84 | €54,238.55 |
| €168,994 | And above | 45% |
Chase Buchanan France tax guide, 2023
The French tax year runs from January to December. Tax offices open for declarations in early April and all declarations must be finalised in May and June (deadline dates vary depending on where you live). Your first declaration must be submitted on paper (supplied by the local tax office) and subsequent declarations can be submitted online.
Social security contributions (cotisations sociales or charges sociales)
Despite the name, social charges in France are not linked to social security. The current rate of social charges for investment income is 17.2% and payable on:
- Interest
- Dividends
- Rental income
- Capital gains
There are other variances in social charges that apply to pension income which may be taxed at 8.3%, 6.6% or 3.8%, depending on the type of pension fund and annual income level.
Social security contributions are charged separately from social charges and are the French equivalent of National Insurance in the UK.
These rates are charged at 9.7% for employment and self-employment incomes for 2023. Pension income is set at 9.1%.[ii]
VAT in France (TVA)
TVA in France is calculated at a base rate of 20% and is charged on most goods and services. Some professionals do not need to charge VAT as their income doesn’t exceed the threshold required to apply TVA. The threshold can vary, so if you will be running a business in France then speak to a tax advisor.
Wealth tax
Regardless of whether you’re a resident in France or not, should your net household real estate assets exceed €1,300,000 in value on 1 January, you will be subject to wealth tax. This applies to a very small group of people and is calculated at a rate of 0.5% to 1.5%, depending on your total net taxable wealth.
French residents pay wealth tax, Impôt sur la fortune Immobilière or IFI. Every year, all real estate assets must be declared to the authorities and then a tax charge is raised against the value of them.
There is a tax-free allowance of €800,000 on real estate assets. Wealth tax is payable where household real estate wealth exceeds €1,300,000 in value.
Please note, that wealth tax (IFI) in France is not the same as capital gains tax. Wealth tax is payable on long-term assets held and not on profits arising from a property sale.
Taxes on selling your property in France
Capital gains tax (Impôt sur les plus-values)
If you sell your primary residential property in France, you are exempt from paying capital gains tax (Impôt sur les plus-values).
However, if selling a secondary residence, i.e. rental, investment or holiday property, you must take capital gains tax (Impôt sur les plus-values) into account. Capital gains tax in France is 19% regardless of your country of residence. It will also be subject to social security contributions at the overall rate of 17.2%.[iii]
This French property tax is notoriously difficult to calculate but is fundamentally calculated by working out the difference between the original purchase price and the sale price. It also considers the costs of work and improvements made on the property over the duration of ownership.
You must be able to produce receipts from registered artisans proving any work for it to be included in any calculation. Capital gains tax should always be investigated in advance of selling.
Tax exemptions
There are a few exemptions and discounts available. Some new-build properties may be exempt from both taxe d’habitation and taxe foncière for the first couple of years.
Reductions in the taxe foncière can be allotted for people aged over 75, those with disabilities, and students if the property is their main residence. Be aware, however, this is only possible if you have submitted a tax return in France declaring your income.
Total exemption from the taxe d’habitation may be given to those aged over 60, providing they are ineligible for wealth tax and are on a low income. Should you have any queries surrounding exemptions and reductions, it is best to enquire at the local tax office.
Getting professional advice
Tax regulations are complex and frequently change. It is highly advisable to seek professional tax advice when buying, owning and selling a property in France.
Any tax advisor that you engage must be authorised to advise in France. Advisors in your home country will unlikely be able to advise you on French tax policies.
French property tax is an inevitable part of buying a property in France. With careful planning and professional advice, you can manage your tax effectively.
[i] https://chasebuchanan.com/wp-content/uploads/2023/03/Chase-Buchanan-Tax-Guide-France-2023-final-1.pdf
[ii] Social charges, https://chasebuchanan.com/wp-content/uploads/2023/03/Chase-Buchanan-Tax-Guide-France-2023-final-1.pdf
[iii] https://www.impots.gouv.fr/international-particulier/capital-gains-sale-property
