← Back to Blog

France has a reputation for high taxes — and French property ownership is no exception. But the system is more nuanced than many buyers expect, and understanding it properly can significantly affect your purchase decision and ongoing costs.

Buying taxes and costs

When you purchase French property, you pay droits de mutation — commonly called "notary fees" though most of the money goes to the state. For existing properties (more than 5 years old), this totals approximately 7–8% of the purchase price. For new-build properties, it drops to around 2–3%.

This is one of the highest transaction tax rates in Europe, and it's worth factoring in from the start. On a €400,000 property, expect €28,000–32,000 in purchase costs.

Annual property taxes

Taxe foncière is the annual land and property tax paid by all property owners, regardless of whether they live there. It varies enormously by location — a Paris apartment might pay €1,500/year, while a rural farmhouse could pay €300. The tax has increased significantly over the past decade.

Taxe d'habitation was the occupancy tax, traditionally paid by whoever lived in the property. It has been abolished for primary residences as of 2023, but still applies to second homes and rental properties. For foreign buyers purchasing a holiday home, this is a meaningful ongoing cost.

Wealth tax (IFI)

France's Impôt sur la Fortune Immobilière (IFI) applies to net real estate assets above €1.3 million. The rates range from 0.5% to 1.5%. Non-residents are liable only on their French property — not their global assets — which makes France relatively attractive for high-net-worth buyers compared to some other countries.

Capital gains tax

French capital gains tax on property is complex. The headline rate is 19% for EU residents plus social charges of 17.2% — a total of 36.2%. However, there are generous taper reliefs based on how long you've owned the property:

• After 22 years: exempt from income tax portion
• After 30 years: fully exempt from all CGT and social charges

This makes France a market where long-term ownership is heavily incentivised. Short-term speculation is expensive; patient ownership is relatively well-treated.

Inheritance considerations

French inheritance law applies to French property regardless of where you live, and France's réserve héréditaire gives children legally protected inheritance rights. This can conflict with inheritance planning structured elsewhere. Get specialist cross-border legal advice before purchasing if estate planning matters.