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France Construction and Real Estate Development Tax Guide

French tax rules for the construction and real estate development sector. The guide covers: the TVA on construction works — the construction of new buildings (the "construction de bâtiments neufs") is subject to TVA at 20%; the renovation of existing buildings (the "travaux de rénovation") is subject to TVA at 10% or 5.5% depending on the nature of the works; the 10% rate applies to: (a) the renovation of housing (more than 2 years old), (b) the improvement works (the "travaux d'amélioration"), (c) the installation of heating and sanitary equipment; the 5.5% rate applies to: (a) the energy-efficiency works (the "travaux d'économie d'énergie" — insulation, heat pumps, solar panels), (b) the works in social housing; the reverse charge mechanism for construction — for certain construction works (the "travaux de construction"), the reverse charge (autoliquidation) applies: the client (the customer) self-assesses the TVA on the invoice from the subcontractor, and the subcontractor issues the invoice without TVA; this applies when the client is a TVA-registered company and the subcontractor is a TVA-registered company (the "travaux de construction — sous-traitance"); the taxe d'aménagement (development tax) — a tax paid by the developer (the "constructeur" or the "promoteur") when a building permit (permis de construire) or a planning declaration (déclaration préalable) is granted; the tax is calculated as: (a) the area of the building (the "surface taxable" — in m²), (b) multiplied by the "valeur forfaitaire" per m² (approximately €1,044 per m² for housing in the Paris region, €932 per m² for the rest of France in 2026), (c) multiplied by the local tax rate (0–5% depending on the commune); the tax is payable in two instalments: 12 months and 24 months after the permit is granted; the CFE (Cotisation Foncière des Entreprises) — the local tax on the rental value of the business property (the "valeur locative cadastrale" — the cadastral rental value for the land and buildings used for the construction business); the CFE rate is set by the commune (typically 10–30% of the rental value); the CFE is deductible from the corporate tax; the VAT deduction on construction works for developers — the real estate developer (the "promoteur immobilier") can deduct the input TVA on construction costs (materials, subcontractors, architects, engineering fees) from the output TVA on the sale of the property; the TVA on the sale of a new property (the "livraison d'un immeuble neuf") is 20% (or the reduced rate if the sale is to an individual for social housing); the developer pays TVA to the tax authorities on the sale price (the "prix de vente TTC" — the VAT-inclusive price); the taxe foncière on development land — the undeveloped land (the "terrains à bâtir") is subject to the taxe foncière sur les propriétés non bâties (TFPNB); the tax is paid by the owner of the land; the rate is set by the commune (typically 10–30% of the cadastral rental value).

The French construction sector is subject to complex TVA rules with multiple rates. All amounts in Euros (EUR). For related reading, see our VAT Guide → and Property Tax Guide →.

TVA on Construction Works

  • 20% for new builds: The construction of new buildings (the "bâtiments neufs") is at the standard TVA rate of 20%. The sale of new properties by a developer is also at 20% (with reduced rates for social housing).
  • 10% for renovation: The renovation and improvement of existing housing (more than 2 years old) is at the intermediate rate of 10%. The 10% rate applies to: (a) all renovation works (including materials and labour), (b) the installation of new equipment (bathroom, kitchen, heating), (c) the extension of the building (up to 20% of the existing surface).
  • 5.5% for energy works: The energy-efficiency works (rénovation énergétique) are at the reduced rate of 5.5%. The conditions: the property must be more than 2 years old, the works must be carried out by a professional with RGE certification.

Taxe d'Aménagement

  • Calculation: The taxe d'aménagement = surface taxable (m²) × valeur forfaitaire (€1,044 Paris region, €932 elsewhere) × communal rate (0–5%). The tax is payable by the person who obtains the building permit (the "bénéficiaire du permis de construire"). The tax is due 12 months and 24 months after the permit is granted.

For the TVA reverse charge on subcontracting in construction, see our VAT Guide →. For the property sale taxes (frais de notaire), see our Property Tax Guide →.