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France Property Tax Guide (Taxe Foncière, Taxe d'Habitation, IFI)

French property taxes. The guide covers: the taxe foncière (the land tax — the annual tax on property ownership: paid by the owner of the property on 1 January; the amount is calculated as the cadastral rental value (valeur locative cadastrale) multiplied by the local tax rate (voted by the commune and the department); the taxe foncière on built property (taxe foncière sur les propriétés bâties — TFPB) and on unbuilt property (taxe foncière sur les propriétés non bâties — TFPNB); the taxe foncière is deductible from rental income (if the property is rented out) and from corporate tax; the taxe foncière for the main residence is not deductible for the owner-occupier; the exemption for the first 2 years for new constructions (the "exonération de 2 ans pour les constructions nouvelles"); the permanent exemption for certain agricultural land and social housing); the taxe d'habitation (the residence tax — the annual tax on the occupation of a property; from 2023, the taxe d'habitation on the main residence has been progressively abolished for all households (100% exemption from 2023); the taxe d'habitation on second homes (résidences secondaires) still applies; the amount is calculated as the cadastral rental value multiplied by the local rate; municipalities in high-demand areas (the "zones tendues") can apply a surcharge of up to 60% on second homes); the droits de mutation (the property transfer taxes — the "frais de notaire"): the registration tax on the purchase of an existing property (the "taxe de publicité foncière" or "droits d'enregistrement") — approximately 5.80% of the purchase price (including the department tax, the commune tax, and the notary fees); the notary fees (the "émoluments du notaire") are approximately 0.8–1% of the purchase price; the total cost for the buyer of an existing property is approximately 7–8% of the purchase price; the VAT on new properties (TVA immobilière) — the purchase of a new property (less than 5 years old) is subject to TVA at 20% (the buyer pays TVA to the developer); the reduced TVA rate of 5.5% applies to social housing; the reduced TVA rate of 10% applies to certain renovation works); the Impôt sur la Fortune Immobilière (IFI) (the wealth tax on real estate — the tax on real estate assets held by individuals with a net value above €1.3 million; the IFI replaced the ISF (Impôt de Solidarité sur la Fortune) in 2018; the IFI applies to real estate assets (and shares in real estate companies) only, not to financial assets; the taxable base is the net value of the real estate assets as of 1 January; the IFI rates are progressive from 0% to 1.50%; the IFI return must be filed with the income tax return); the rental income taxation (the "revenus fonciers" — the rental income from unfurnished property is taxed in the "revenus fonciers" category; the rental income from furnished property is taxed as BIC (bénéfices industriels et commerciaux) in the "location meublée" category (LMNP — Loueur en Meublé Non Professionnel); the rental income from unfurnished property: the taxpayer can deduct the actual expenses (the "régime réel" — the deductible expenses include: the taxe foncière, the maintenance costs, the interest on the acquisition loan, the management fees, the insurance, the amortisation (depreciation) of the building is NOT deductible for the revenus fonciers — this is a key difference from the LMNP regime where amortisation IS deductible); the micro-foncier regime — a 30% standard deduction on gross rental income (capped at €15,000 of annual rental income); the LMNP (Loueur en Meublé Non Professionnel) — the rental income from furnished property is taxed as BIC; the taxpayer can deduct the actual expenses (including amortisation of the building and the furniture), which can create a tax loss that offsets other BIC income; the micro-BIC regime — a 50% standard deduction for LMNP (capped at €77,700 of annual rental income).

French property taxes are complex but offer significant advantages for real estate investors through the LMNP regime. All amounts in Euros (EUR). For related reading, see our Personal Tax Guide →, Wealth Tax (IFI) Guide →, and Real Estate Investment Guide →.

Taxe Foncière

  • Calculation: The taxe foncière is calculated as the cadastral rental value (valeur locative cadastrale — the theoretical annual rental value of the property, revalued annually by the inflation index) multiplied by the local tax rate (taux d'imposition) voted by the commune (municipality) and the department. The average taxe foncière in France is approximately €800–€1,200 per year for a standard apartment, but varies significantly by location (Paris is relatively low; the south and rural areas can be higher).
  • Exemptions and reductions: (a) New constructions are exempt for the first 2 years (the "exonération de 2 ans"), (b) persons over 75 with low income are exempt, (c) persons benefiting from the ASPA (minimum pension) are exempt, (d) energy-efficient renovation works may qualify for a temporary exemption of up to 5 years, (e) social housing (HLM) is permanently exempt.

Taxe d'Habitation

  • Main residence — fully abolished: The taxe d'habitation on the main residence has been fully abolished as of 2023. All households pay 0% on their main residence. The taxe d'habitation on second homes (résidences secondaires) still applies at 100% of the calculated amount. The second-home surcharge (majoration) of up to 60% applies in municipalities in the "zones tendues" (high-demand areas — approximately 1,000 municipalities, including Paris, Lyon, Bordeaux, Marseille, and the coastal areas).

Property Transfer Taxes (Frais de Notaire)

  • Existing property: The buyer of an existing property (more than 5 years old) pays approximately 7–8% of the purchase price in transfer taxes and notary fees. Breakdown: (a) department transfer tax (droits de mutation départementaux) — 4.50%, (b) commune tax (taxe communale) — 1.20%, (c) registration fee (frais d'assiette) — 0.70%, (d) notary fees (émoluments) — approximately 0.8–1.0%, (e) mortgage registration (formalités hypothécaires) — approximately 0.10%.
  • New property: The purchase of a new property (less than 5 years old) is subject to TVA at 20% (included in the price charged by the developer). The transfer taxes (frais de notaire) on a new property are much lower — approximately 2–3% of the purchase price. The reduced TVA rate of 5.5% applies to social housing and certain types of subsidised housing.

For the IFI (wealth tax on real estate), see our Wealth Tax (IFI) Guide →. For the rental income taxation and the LMNP regime, see our Real Estate Investment Guide →.

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