Taxes for second home owners in France
Anyone buying property in France should be aware of the main ongoing taxes: the taxe foncière, the taxe d'habitation for second homes, and, above a certain asset threshold, the IFI.
Taxe foncière – annual property tax
- Payable by the owner on January 1st, regardless of their residency status
- In the year of purchase, the notary apportions the tax between the seller and buyer
- The notice is issued annually in October, usually sent to the primary residence
- The amount depends on the municipality and the cadastral rental value (valeur locative cadastrale) – often higher in tourist regions
Taxe d'habitation – housing tax for second homes
- Abolished for primary residences in 2023, it remains for second homes
- Levied on the owner as of January 1st
- The basis is also the cadastral value, plus potential municipal surcharges in popular regions
- The exact amount will only be revealed by the first tax notice – this is particularly important if the property was previously used as a primary residence
IFI – wealth tax for net real estate assets exceeding €1.3 million
- Applies only to real estate assets (houses, apartments, shares in real estate companies), not total wealth
- Threshold: €1,300,000 net, after deducting mortgages and loans
- Also applies to non-residents with French real estate assets above the threshold
- Progressive, starting rate approx. 0.5 %
- A "Décote" (discount rule) reduces the tax to almost zero for values just above the threshold. From approximately €1.4 million, it applies in full
Indicative values for the annual IFI:
Net property value approx. €1,000,000 = approx. IFI/year €0 (below threshold)
Net property value approx. €1,300,000 = approx. IFI/year €0–500 (due to Décote)
Net property value approx. €1,500,000 = approx. IFI/year approx. €3,900
Net property value approx. €2,000,000 = approx. IFI/year approx. €7,400
Net property value approx. €3,000,000 = approx. IFI/year approx. €15,700
Net property value approx. €4,000,000 = approx. IFI/year approx. €25,700
CFE - Cotisation Foncière des Entreprises
Anyone who rents out the property fully or partially furnished (location meublée) may also be subject to CFE (Cotisation Foncière des Entreprises). It does not apply to purely personal use or unfurnished rentals.
All information is provided without guarantee and for general guidance only. It does not replace individual tax advice. We are not tax advisors, but we are happy to connect you with qualified tax experts.
