Taxes in France

31 August 2017

For non-residents of France, taxes associated on real estate are relatively low in comparison to countries like the USA or UK.

Transaction and registration taxes

Buyers pay real estate registration fees of 5.81%. When purchasing shares in a company, the assets of which mainly consist of real estate, registration is 5.00% of the share value.

Notary fees range from 0.825% to 4.000%, plus 20% VAT.

Transaction value, EUR	Commission, %
Under 6,500	4.00
6,500–17,000	1.65
17,000–60,000	1.10
Over 60,000	0.825

Ownership, residence and rental taxes

Owners pay real estate tax (taxe foncière) and residence tax (taxe d'habitation) annually. Real estate tax is 0.5–1.5% of the estimated property rental revenue. Residence tax depends on the municipality and can amount to the value of a month’s rent depending on the place of residence.

Property rental tax is calculated based on the rental income after deducting expenses and ranges from 5–45% depending on the revenue. Non-residents pay at least 20%. In addition to this tax, there is a mandatory social contribution of 15.5% which is to be paid only by French residents using national social services. For instance, individuals in the highest tax band will be charged 60.5% in total. Rental income received by companies is 33.33% after deducting expenses and depreciation.

Taxable income, EUR	Rate, %
Under 5,963	5
5,963–11,896	10
11,896–26,420	15
26,420–70,830	20
70,830–150,000	41
Over 150,000	45

Wealth and capital gains tax

Wealth tax (Impôt de Solidarité sur la Fortune or ISF) is payable by individuals with assets over €1.3M, on their assets over €800,000 at progressive rates.

Taxable value of assets, thousands EUR	Rate, %
Under 800	0
800–1,300	0.50
1,300–2,570	0.70
2570–5,000	1.00
5,000–10,000	1.25
Over 10,000	1.50

Owners may be exempt from capital gains tax on property (impôt sur les plus-values immobilières) for their first property sale (subject to conditions). From 1 August 2015, citizens of all countries are charged 19% capital gains tax, 15.5% social contribution (for residents using social services) and an additional tax of 6%. EU residents pay capital gains tax at 19% rate, bringing their total charges to 40.5% on the sale of real estate.

There are tax breaks for long-term owners: 6% tax deduction on capital gains (19.00% or 33.33%) if the property has been owned for 6–21 years and 4% for 22nd year. Real estate owned for 23 years or more are exempt from capital gains tax on property. There is another 1.65% tax allowance on social contributions (15.5%) if the property was owned for the period of 6 to 21 years, 1.6% for 22nd year of ownership, 9% for ownership of 23–30 years. After 30 years owners are exempt from paying social contribution.

As of 1 January 2013, there is an additional tax of 2–6% charged on real estate sales.

Inheritance tax

Inheritance tax (impôt sur les successions) is calculated on the value of property. There are no taxes on real estate transferred between spouses. Charges for the transfer of property from parents to children range from 5% to 45%. There are tax deductions available reaching €100,000. Inheritance tax is not charged on property owned by a company. Instead, the company pays the taxes that exist in the country of incorporation.

Taxable value, EUR	Rates, %
Under 8,072	5
8,072–12,109	10
12,109–15,932	15
15,932–552,324	20
552,324–902,838	30
902,838–1,805,677	40
Over 1,805,677	45

Income and corporate taxes

Income tax ranges from 0–45% and individuals earning very high incomes (over €1M) pay an additional 3–4% on top of that.

Income, EUR	Rates, %
Under 5,963	0
5,964–11,896	5.5
11,897–26,420	14
26,421–70,830	30
70,830–150,000	41
150,001–1,000,000	45
Over 1,000,000	48–49

Corporate tax rate in France is 33.33%.

Disclaimer: the information in the above article is for reference and may be subject to change over time. Persons interested in exact calculations should contact a certified tax specialist in this country before purchasing property.