Real Estate Taxes in France

Nonresidents are taxed on their income from French sources. Married couples may be taxed jointly or separately.

Income Tax

Income of individuals is taxed at progressive rates.

Income Tax Rates for Nonresidents (2024)

TAXABLE INCOME, EUR TAX RATE
Up to €11,294 0%
€11,295 - €28,797 11%
€28,798 - €82,341 30%
€82,342 - €177,106 41%
Over €177,106 45%

Rental Income

Rental income is taxed under the business profits heading of income tax for furnished properties, which includes bed and breakfasts and gites (self-catering holiday cottages). If the gross furnished rental income is less than €77,700 (€188,700 for listed furnished tourist accommodation) per annum, a flat 71% can be deducted to cover all expenses and claimable deductions (which simplifies bookkeeping), and the balance (i.e., 29%) will be taxed at the prevailing rate of 20%.

Unfurnished lettings are taxed under income tax as ´real property income´. Deductions can include repairs, maintenance and improvements (excluding construction), local taxes, employee costs, mortgage interest expenses, management fees, and insurance costs. If revenues are less than €15,000, a 30% fixed deduction is applied.

Tax losses can be set against all personal income up to €11,300.

Capital Gains Tax

Capital gains arising from the sale or transfer of property are subject to regular income tax rates. The purchase price of the property can be deducted from the tax base.

Capital Gains Tax Rates for Real Estate Held Over Five Years

  • 6% for each year of holding after the fifth year
  • 4% for the 22nd year of holding

This leads to a full income tax exemption of capital gains after a holding period of 22 years. Special surtaxes of up to 17.2% apply on the profits on real estate sales. The tax rate decreases as the holding time increases, with total exemption requiring a holding period of 30 years.

Corporate Tax

Income Tax

Corporate tax applies automatically to sociétés anonymes, sociétés par action simplifiées, sociétés à responsabilité limitée, sociétés en commandite par actions, and some cooperatives. Corporation tax may also apply to other bodies, such as sociétés civiles, and even to sociétés de personnes (partnerships), depending on the nature of their business.

The corporate tax rate is currently 25%. Income-generating expenses are deductible when calculating taxable income.

Buying and Selling Costs/Taxes in France

Cost Rate
Property Transfer Tax 5.09-5.81%
Agent Fee Buyer 2.00-5.00%
Agent Fee Seller 2.00-5.00%
Legal 1.00-1.50%
Notary 1.00-2.00%
Roundtrip Cost 11.09% - 19.31%
Source: Global Property Guide, PWC

Property Holding Tax

There are two types of property taxes in France:

  1. Taxe d´habitation - payable by whoever resides in the building.
  2. Taxe foncière - payable by the owner of the property, which can include:
    • Taxe foncière bâtie (for the building)
    • Taxe foncière non bâtie (for the land)

Taxe Foncière (2024 Rates)

  • Taxe Foncière Bâtie (TFB): Applies to buildings and is levied at rates ranging from 0.5% to 1.5% of the cadastral value of the property.
  • Taxe Foncière Non Bâtie (TFNB): Applies to land and is levied at rates determined by local authorities.

Additional Property Taxes

  • Wealth Tax (Impôt sur la Fortune Immobilière - IFI): Levied on real estate assets if the total value exceeds €1.3 million. The tax rates range from 0.5% to 1.5% on the value exceeding this threshold.
  • Annual Property Wealth Tax: Applies to non-resident owners of French real estate whose properties are valued at over €1.3 million, with progressive rates from 0.5% to 1.5%.