Property Tax Overview in France

What property taxes apply to owners in France?

France operates several distinct property-related taxes that apply at different stages of ownership. The four main levies are: (1) taxe fonciere, an annual tax paid by the owner every autumn regardless of whether the property is occupied or rented; (2) taxe d'habitation sur les residences secondaires, an annual occupancy tax that survived the 2023 abolition for primary homes and continues to fall on second-home owners; (3) droits de mutation a titre onereux (DMTO), a one-time transfer duty collected by the notaire at the moment of purchase; and (4) the impot sur la fortune immobiliere (IFI), an annual wealth tax on net real estate above EUR 1.3 million. Each levy has its own calculation base, rate-setter, and deadline. A qualified tax professional or notaire can confirm how these interact for a specific ownership situation. See also the France country overview for the broader French tax context.

How is taxe fonciere calculated and who pays it?

The taxe fonciere sur les proprietes baties is governed by Articles 1380 and 1415 of the Code General des Impots (CGI). The owner registered on 1 January of the tax year bears the full annual charge even if the property is sold later in the year; buyer and seller commonly adjust this pro-rata in the sale contract, but the adjustment is contractual, not statutory [SC1]. The calculation follows a two-step formula: the cadastral rental value (valeur locative cadastrale, or VLC) is first halved by a mandatory 50% management-cost abattement, and the resulting net base is then multiplied by the composite rate voted annually by the commune, intercommunalite, and any applicable public land establishment. VLC represents the theoretical annual rent the property could command in normal market conditions; it was set at historical 1970s market levels and is revalued each year by a national coefficient tied to the harmonised consumer price index (IPCH). For 2025 the coefficient was +1.7%; for 2026 the DGFiP has set the revaluation at +1.6% under Article 1518 bis CGI [SC1]. Because communes set their own rates independently, the effective tax burden varies widely: Paris applied a composite rate of roughly 20%, Lyon roughly 30%, and Marseille over 40% in recent years [SC2]. Notices are typically dispatched from late August and fall due by 15 October (paper) or 20 October (online) each year. New constructions receive a two-year exemption under Article 1383 CGI. Owners aged 75 or over with modest incomes may qualify for a full exemption; lower thresholds attract partial relief.

Does taxe d'habitation still apply?

The taxe d'habitation on primary residences was progressively reduced between 2018 and 2022 and was fully abolished for all households from 1 January 2023 under Article 1407 bis CGI as amended. No household pays this levy on a main home from 2023 onwards [SC3]. However, the abolition was explicitly limited to primary residences. Second homes, furnished holiday lets, and properties held by non-resident owners as vacation properties remain fully liable for the taxe d'habitation sur les residences secondaires. The tax is computed on the same cadastral rental value as taxe fonciere but without the 50% abattement, multiplied by the municipal rate [SC3]. Since 2017, communes in zones tendues (areas of persistent housing shortage, broadly defined as continuous urban zones exceeding 50,000 inhabitants with supply-demand imbalance) may apply a surcharge of between 5% and 60% on the municipal share. By 2025, 1,628 communes had voted a surcharge, of which 657 applied the maximum 60% rate, concentrated in the Auvergne-Rhone-Alpes, PACA, and Occitanie regions [SC3]. Owners in coastal or ski-resort communes should verify the exact local rate, which can significantly increase the annual bill compared to the base rate alone. Payment notices arrive in the final quarter of the year, with deadlines typically around 15 December.

What are droits de mutation (notaire transfer taxes)?

When a resale property (bien ancien) changes hands, the buyer bears droits de mutation a titre onereux (DMTO) collected by the notaire at the signing of the acte authentique. The charge has three components: a departmental tax (currently 4.5% standard, raised to 5.0% in over 70 departments including Paris, Hauts-de-Seine, Bouches-du-Rhone, Rhone, Gironde, and Nord since 1 April 2025 under a provision of the 2025 Finance Act allowing departments to increase the ceiling by 0.5 points through 30 April 2028); a municipal surtax of 1.20%; and state administrative fees of 2.37% of the combined taxes [SC4]. Adding notaire emoluments (on a graduated sliding scale) and disbursements, total acquisition costs for a resale property land at roughly 7-8% of the purchase price in standard-rate departments and 7.5-8.5% in departments that have adopted the higher departmental rate [SC4]. First-time buyers purchasing a primary residence in eligible zones qualify for a 50% reduction on the departmental component, cutting acquisition costs by approximately 2.25-2.50 percentage points. New-build property (acquired within five years of completion, subject to TVA) attracts a much lower 0.715% DMTO but also carries 20% TVA on the construction component, which is usually embedded in the developer price. DMTO is distinct from the notaire's personal professional fees, which are separately regulated.

What is the IFI wealth tax and who is liable?

The impot sur la fortune immobiliere (IFI) was introduced in 2018 under Article 964 CGI, replacing the broader ISF (impot sur la fortune) which covered all forms of wealth. IFI applies exclusively to real estate assets. French tax residents are liable on their worldwide real estate net of qualifying debts; non-residents are liable on French-situate real estate only [SC5]. The trigger threshold is EUR 1.3 million of net taxable real estate as of 1 January of the tax year, assessed at fair market value. Once the threshold is crossed, tax is calculated on the portion above EUR 800,000 using the following progressive scale (unchanged since 2018): EUR 0 to EUR 800,000 at 0%; EUR 800,001 to EUR 1,300,000 at 0.50%; EUR 1,300,001 to EUR 2,570,000 at 0.70%; EUR 2,570,001 to EUR 5,000,000 at 1.00%; EUR 5,000,001 to EUR 10,000,000 at 1.25%; above EUR 10,000,000 at 1.50% [SC5]. A principal residence benefits from a 30% valuation discount under Article 973 CGI. Qualifying debts (acquisition loans, renovation loans, property taxes) reduce the taxable base. A smoothing band (decote) applies for net estates between EUR 1.3 million and EUR 1.4 million to soften the entry cliff. A global tax cap (plafonnement) limits the combined IFI and income tax liability to 75% of the prior-year taxable income; any excess reduces the IFI due. The 2026 IFI declaration is filed alongside the annual income tax return; online deadlines ran from 21 May (Zone 1) to 4 June 2026 depending on the department group [SC5]. Around 194,000 households declared IFI in 2025, generating approximately EUR 2.3 billion in revenue. A qualified tax professional should be consulted to assess deductible debts and valuation methodology for complex real estate portfolios.

French property taxation is layered and jurisdiction-specific. Rates, exemption thresholds, and surcharge decisions change annually at both national and communal levels. A notaire handles DMTO at purchase; a qualified French tax professional (expert-comptable registered with the Conseil National de l'Ordre des Experts-Comptables, or a conseil fiscal) is the appropriate resource for annual IFI planning, taxe fonciere exemption applications, and non-resident reporting obligations. Use the TaxPros Rated directory for France to find credentialed professionals serving cross-border and domestic clients.