Investing in real estate or owning property in France requires a clear understanding of the various taxes and duties that may arise at each stage: purchase, ownership, rental, sale, or transfer of assets. The French property tax system is relatively complex, encompassing not only national taxes but also local (municipal) taxes and contributions.
Below is an overview of the main property-related taxes, together with a brief explanation of each.
For a more detailed breakdown, you may consult the link “Learn more about the tax…”, which outlines applicable rates, calculation methods, exemptions, and practical examples.
1. Notary Fees (Registration Duties / Transfer Taxes)
These are the first costs a buyer encounters when purchasing a property in France. Registration fees include transfer duties levied by the State for the registration of ownership, local departmental taxes, and the notary’s fees.
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For resale (existing) properties: approximately 8 % of the purchase price (all costs included).
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For new-build properties (up to 5 years old): approximately 2 %.
✦ Registration fees are paid to the notary on the day the deed of sale is signed.
Learn more → Notary fees
2. Property Tax (Taxe foncière)
This is an annual tax payable by the owner of a property, whether it is owner-occupied or rented out.
The amount of property tax is based on the property’s cadastral rental value and the rates voted by the local authorities (municipalities, inter-municipal bodies, and departments).
✦ Certain categories of properties (new-build homes, high energy-performance properties) may benefit from temporary exemptions.
Learn more → Property tax (Taxe foncière)
3. Residence Tax (Taxe d’habitation)
This tax was previously payable by anyone occupying a property, whether as an owner or a tenant.
Since 2023, it has been abolished for primary residences, but remains applicable to secondary residences and certain high-income property owners.
✦ The amount of the tax depends on the size of the property, its location, and the taxpayer’s income level.
Learn more → Residence tax (Taxe d’habitation)
4. Rental Income Tax
If a property located in France is rented out, the rental income received is subject to taxation.
Rental income may be declared under one of the following two regimes:
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Micro-foncier: a simplified regime for modest rental income (up to €15,000 per year), with a flat-rate allowance of 30%.
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Real regime (régime réel): the standard regime, allowing deduction of all actual expenses (renovation works, insurance, mortgage interest, etc.).
✦ For non-residents, withholding tax and social contributions of 17,2 % also apply.
Learn more → Rental income tax
5. Real Estate Wealth Tax (Impôt sur la Fortune Immobilière – IFI)
This tax applies to owners whose total value of real estate assets in France exceeds €1,3 million.
The rate is progressive, ranging from 0,5 % to 1,5 %, and applies only to the portion of the value exceeding this threshold.
✦ The IFI base includes directly held properties, rented properties, and shares in companies that own real estate.
Learn more → IFI
6. Capital Gains Tax on Real Estate
When a property is sold for a price higher than its purchase price, the difference constitutes a capital gain, which is subject to taxation.
For individuals, the rate is 19% plus social contributions of 17.2%, with a system of gradual allowances depending on the length of ownership.
✦ Primary residences are fully exempt, while for secondary residences, full exemption applies after 22 years of ownership.
Learn more → Capital Gains Tax
7. 3% Tax
This is a specific tax applied to foreign companies that own real estate in France through legal structures.
The tax amounts to 3 % of the market value of the property.
✦ In certain cases, companies can avoid this tax by declaring their ownership structure to the French tax authorities.
Learn more → 3% Tax
8. Inheritance and Gift Tax
When a property is transferred by inheritance or gift, a tax is applied, with rates depending on the degree of kinship and the value of the estate.
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Close relatives: from 5 % to 45 %
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Distant relatives or unrelated individuals: up to 60 %
✦ Significant exemptions and allowances are available for spouses, children, and grandchildren.
Learn more → Inheritance Tax
Conclusion
The French tax system applies to all aspects of property ownership, from purchase to inheritance.
A thorough understanding of the main taxes and their specific rules allows property owners to plan efficiently, optimize their tax burden, and avoid unforeseen costs.
Our experts at Property ServiceAzur will assist you with the purchase of your property as well as with tax optimisation and the management of your real estate assets.
