French property taxes are frequently misunderstood by international buyers — and that misunderstanding can lead to unpleasant surprises after purchase. This guide covers the main taxes you will encounter as a foreign buyer, both at acquisition and during ownership, in plain language.
Taxes at the time of purchase
Droits de mutation (transfer taxes)
The largest tax cost at acquisition. For existing properties (anything more than 5 years old), the transfer taxes are approximately 6.3% of the purchase price in most départements (since 2025). These are collected by the notaire and paid to the local government (département and commune). They are not negotiable and cannot be avoided through any legitimate structure.
For new-build properties (less than 5 years old, first sale), transfer taxes drop to 0.715% — but VAT at 20% is included in the purchase price instead. The net cost is often similar.
Notaire fees
On top of transfer taxes, the notaire charges a professional fee of approximately 0.8–1% (regulated by the state on a sliding scale). The total "notaire costs" you will see quoted — typically 8.5–9% for existing properties — includes both the transfer taxes and the notaire's professional fee.
Annual taxes during ownership
Taxe foncière
An annual property ownership tax, paid by whoever owns the property on January 1st of each year. The amount is assessed on the property's theoretical rental value (valeur locative cadastrale) and varies significantly by location, size, and local tax rates. A €2M apartment on the Côte d'Azur might carry a taxe foncière of €3,000–€8,000 per year. Countryside properties with significant land often pay less than urban equivalents of similar value.
Taxe d'habitation
Abolished for primary residences as of 2023, but still applies to secondary homes. The rate varies by commune. In some sought-after tourist areas, communes have been authorised to apply a surcharge of up to 60% on the base taxe d'habitation for secondary homes — a measure aimed at encouraging year-round residency. Check the rate for any specific commune before purchase.
IFI (Impôt sur la Fortune Immobilière) — wealth tax on property
France applies a real estate wealth tax to individuals whose net French real estate assets exceed €1.3M. The rate is progressive, starting at 0.5% and rising to 1.5% for assets above €10M. Crucially, this applies to non-residents on their French property only — not their worldwide assets. A buyer with a €3M property in Provence and €20M in financial assets held outside France would only be liable for IFI on the €3M French property (net of any French mortgage).
Taxes on rental income
If you rent your French property, whether short-term (Airbnb-style) or long-term, that rental income is taxable in France — regardless of where you are resident. France has double taxation treaties with most countries, so you will not generally pay the same tax twice, but you will need to file a French tax return each year.
The LMNP regime
If you rent your property furnished, you may qualify for the Loueur en Meublé Non Professionnel (LMNP) regime, which allows you to deduct depreciation and other costs from your rental income, often reducing your effective tax rate to near zero in the early years of ownership. This is one of the most tax-efficient legal structures available to foreign property investors in France.
Capital gains tax on sale
When you sell a French property as a non-resident, any gain is subject to French capital gains tax at 19%, plus social charges at 17.2% — a combined rate of 36.2%. However, France applies a significant taper relief:
- Properties held for more than 5 years benefit from a reduction in taxable gain
- After 22 years of ownership, capital gains tax falls to zero
- After 30 years of ownership, all social charges also fall to zero
This taper structure reinforces France as a long-term hold market. Buyers who purchase with a 10–15 year horizon benefit from a dramatically lower effective CGT rate than those who sell within 5 years.
Inheritance — the forced heirship problem
This is the area that most surprises buyers from common law countries (UK, US, Australia, Canada). French law applies réserve héréditaire — forced heirship rules that guarantee a minimum proportion of your French estate to your children, regardless of your will. For buyers who wish to leave their French property to a partner, trust, or other beneficiary in ways that might conflict with these rules, the solution is typically to purchase through a company structure (SCI, SAS) rather than in personal name. We always recommend discussing this with a specialist cross-border estate planning lawyer before acquisition.