French Property Taxes for Owners: Taxe Foncière and IFI
Owning property in France means paying a set of taxes that newcomers often find confusing: some are paid once when you buy, some every year, and one only applies to wealthier owners. This explainer covers taxe foncière, taxe d'habitation on second homes, the IFI real estate wealth tax and purchase taxes, with notes on what the 2027 budget debate means for owners as of late October 2026.
Key takeaways
- Taxe foncière is the annual property tax paid by whoever owns the property on 1 January; the amount is set locally.
- Taxe d'habitation now applies only to second homes, and some vacant homes may face extra taxes in some areas.
- IFI, the real estate wealth tax, applies only when your net taxable real estate assets exceed €1.3 million.
- Purchase costs ("frais de notaire") are mostly transfer taxes: about 7% to 8% for existing homes and 2% to 3% for new builds.
- Budget pressure means local and national property taxes can change, so check official sources every year.
Whether you live in your French home, use it as a holiday base or rent it out, you will meet French property taxes at three moments: when you buy, every year while you own, and when you sell or receive income from the property. Knowing which tax applies when helps you budget, avoid penalties and compare properties fairly.
This is general information, not tax advice. Rates and thresholds can change in each finance law, and the 2027 budget is still being debated. Check impots.gouv.fr and service-public.fr for the current rules, and ask a notaire or tax adviser about your own situation, especially if you live outside France.
Taxes when you buy
The so-called notary fees (frais de notaire) are mostly taxes collected by the notaire on behalf of the state and local authorities, plus the notaire's own regulated fees and some disbursements.
- Existing homes: total costs of about 7% to 8% of the price, mainly transfer taxes (droits de mutation à titre onéreux, DMTO).
- New builds: about 2% to 3%, because new homes are mainly subject to VAT included in the price rather than full transfer taxes.
Since 1 April 2025, departments may raise the departmental part of the transfer tax from 4.5% to 5% until 2028. Many have done so. Departments can also vote to exempt first-time buyers from the increase, so the exact rate depends on where the property is and who is buying.
Pro tip
Ask the notaire for a written estimate of all purchase costs before you sign the preliminary contract (compromis de vente). It shows exactly how much cash you need on top of the price and deposit, and banks usually expect you to fund these costs from savings.
Taxe foncière: the annual owner's tax
Taxe foncière is an annual tax on owning built property (taxe foncière sur les propriétés bâties), with a separate version for land. It is paid by whoever owns the property on 1 January of the tax year, even if you sell in February. In a sale, the buyer and seller often agree in the deed to share the year's bill in proportion to time owned, but legally the tax office bills the 1 January owner.
How it is calculated
The tax is based on the property's cadastral rental value (valeur locative cadastrale), a theoretical annual rent set by the tax administration, reduced by a standard allowance. Local authorities, mainly the commune and groupings of communes, then apply their own rates. Two similar flats in different towns can therefore have very different bills.
The bill may also include extra charges such as the household waste collection tax (taxe d'enlèvement des ordures ménagères), which landlords can usually pass on to tenants.
Who pays when the property is rented
The owner pays taxe foncière, even if a tenant lives in the property. For rental investors it is a cost to include in yield calculations, and under the real regime it is generally deductible from rental income.
Common mistake
Budgeting with the previous owner's taxe foncière figure from years ago. Bills are revalued regularly and local rates can rise, especially when councils face tighter budgets. Ask for the latest notice (avis d'imposition) and check whether the commune has announced rate changes.
Taxe d'habitation: now for second homes
Taxe d'habitation used to be paid by everyone living in a home. It has been abolished for primary residences and now applies only to second homes (résidences secondaires) and certain other premises. It is paid by whoever occupies or has the use of the property on 1 January.
For foreign owners who use a French home for holidays, this matters: you are likely to pay both taxe foncière as owner and taxe d'habitation on the second home. In some areas with housing shortages, communes can add a surcharge on second homes, and some vacant homes may face extra taxes. Rules depend on the location, so check with the local tax office.
| Tax | When | Who pays | Set by |
|---|---|---|---|
| Transfer taxes (in notary fees) | On purchase | Buyer | State and department |
| Taxe foncière | Every year | Owner on 1 January | Local authorities |
| Taxe d'habitation | Every year, second homes only | Occupant on 1 January | Local authorities |
| Vacant home taxes | Every year, in some areas | Owner | State or commune |
| IFI | Every year, above threshold | Owner with net real estate over €1.3 million | State |
Declaring your property: a yearly duty
Owners in France must declare the occupancy status of each property they own through the "Gérer mes biens immobiliers" service on impots.gouv.fr: whether it is your main home, a second home, rented or vacant, and who occupies it. The tax office uses this to decide who owes taxe d'habitation and any vacant home tax. Update it when anything changes, such as a new tenant or a switch from renting to personal use.
- Create or open your account on impots.gouv.fr. Non-residents can do this too, using their tax number.
- Check the list of properties. Make sure each one is listed correctly with the right ownership share.
- Declare the occupancy. Indicate main residence, second home, rented (with tenant details) or vacant.
- Watch for notices. Taxe foncière and taxe d'habitation notices are usually available online in your account; set up payment methods in time.
- Keep records. Save notices, leases and proof of occupancy in case of questions later.
IFI: the real estate wealth tax
France replaced its general wealth tax with the IFI (impôt sur la fortune immobilière), which targets property only. It applies only to real estate: property you own directly, and in many cases real estate held through companies or certain investment funds. It applies when your household's net taxable real estate assets exceed €1.3 million on 1 January.
Who is affected
- French tax residents are assessed on their worldwide real estate.
- Non-residents are generally assessed only on French real estate.
- Debts linked to the property, such as a mortgage, can generally reduce the taxable value, within rules.
- Your main residence usually benefits from an allowance on its value.
With Paris apartments averaging about €9,657 per m² (Foncia, August 2026), a large family flat in central Paris plus another property can bring some owners close to the threshold. If that might be you, get a valuation and ask an adviser how debts, allowances and ownership structures apply.
Example
Imagine the Laurent family, French residents who own their Paris flat and a holiday house in Brittany, with a mortgage on the house. They add up the market value of both, apply the main-residence allowance and deduct the remaining loan. The result is just under the threshold, so they do not owe IFI this year, but they plan to repeat the calculation each year as the loan shrinks. All names and details are made up.
Taxes on rental income and sale gains
If you rent out your property, rental income is taxed in France under income tax rules plus social charges, with different treatment for unfurnished and furnished lettings. When you sell a property that is not your main residence, a capital gains tax usually applies, with relief that increases the longer you hold. For furnished landlords under LMNP status, since 15 February 2025 depreciation claimed under the real regime is added back when calculating the gain on sale.
The details are beyond the scope of this explainer and change often. The site's separate guide to rental investment in France covers the main regimes.
What the 2027 budget debate means for owners
On 1 October 2026, Prime Minister Sébastien Lecornu's government presented a 2027 draft budget with a €54 billion "effort" to cut the deficit from an expected 5.4% of GDP at end-2026 to 5% in 2027. Measures include restraint on local government spending. The government has no clear majority in parliament, so the budget may change, and debate could run into 2027.
For owners, the practical points are:
- Local taxes can rise. When councils face tighter funding, taxe foncière rates and second home surcharges are among the levers they control.
- National rules can change. Wealth taxes, rental tax regimes and transfer taxes all appear in finance laws and can be amended during debate.
- Timing is uncertain. Until the budget is adopted, avoid decisions that depend on a rumored change. Check the final text and official guidance.
As of late October 2026, the debate is taking place alongside cost-of-living protests and higher government borrowing costs. None of that changes your current tax bill, but it is a reason to keep a buffer in your property budget.
Your property tax checklist
- Get a written estimate of purchase costs from the notaire before signing
- Ask the seller for the latest taxe foncière notice
- Agree in the deed how the year's taxe foncière is shared
- Declare occupancy on impots.gouv.fr and update it when anything changes
- Budget for taxe d'habitation and any surcharge if it is a second home
- Estimate your net real estate assets each 1 January against the IFI threshold
- Check your home country's rules and any tax treaty if you live outside France
- Review the adopted 2027 budget for changes affecting owners
Frequently asked questions
Do I pay taxe foncière if I sold the property during the year?
The tax office bills whoever owned the property on 1 January. In practice, the sale deed often sets out how buyer and seller share that year's bill, so check the deed.
Is taxe d'habitation gone completely?
No. It no longer applies to primary residences, but it still applies to second homes and some other premises, and some areas add surcharges.
Do non-residents pay IFI?
Non-residents are generally assessed only on their French real estate, and only if its net taxable value exceeds €1.3 million. Tax treaties and ownership structures can affect the result, so take advice.
Can I reduce my property taxes?
Some exemptions and reliefs exist, for example for certain new builds, older or low-income owners, or energy works, depending on local decisions. Ask the local tax office or an adviser what applies to your property.
Related reading
The bottom line
French property taxes follow a clear pattern once you see it: transfer taxes when you buy, taxe foncière every year as owner, taxe d'habitation only on second homes, and IFI only above €1.3 million of net real estate. Add income tax on rent and capital gains tax on sale, and you have the full picture.
Build these costs into your budget from the start, keep your occupancy declaration up to date, and review the rules each year, especially while the 2027 budget is debated. Check official sources and take professional advice for your own case.
