Real Estate Taxes in France
Those wishing to buy real estate in France are often concerned about the taxes they will have to pay — whether at the time of purchase, or the yearly taxes resulting from being a French real estate owner. This article will provide a brief overview, highlighting the types of taxes and some key points to consider.
There are three types of taxes that you will have to pay when buying and owning real estate in France:
a tax paid to the notaire* at the time of purchase (“Droits d’Enregistrement”), also known as the “notaire’s fee” or “notaire’s costs”
a yearly property tax (“Taxe Foncière”)
and a yearly residence tax (“Taxe d’Habitation”)
The notaire's tax ("droits d'engregistrement") is payment for change of real estate ownership. It is paid to the notaire no later than the day of the final contract signing whereby the change of ownership officially takes place.
The sum depends on the purchase price, the year of construction, and the department where it is located. Fees for recent buildings (those less than five years old) are approximately 2-3% of the purchase price, and the fee for older buildings are generally 6-7% of the price.
For example, the notaire’s tax for a house in Haute-Savoie France (department number 74), first built in 1999, and worth 400,000 euros will be approximately 30,000 euros.
This is why, when planning to purchase real estate in France, we advise you to plan your budget with the notaire’s tax in mind. If your budget is for a house worth 400,000 euros as in the above example, your “real” budget should be 430,000 to account for the eventual notaire’s tax.
You will find a calculator of the notaire’s tax here.
Yearly Property Tax (“Taxe Foncière”)
The taxe foncière is a yearly property tax paid by real estate owners.
The amount depends on the size of the building or apartment, and the location. This tax is directly related to the rental amount that the real estate could bring if it was rented out. Therefore, more prestigious locations have a higher rental value, and, by consequence, higher property taxes.
For example, a house worth 400,000 euros in proximity of Thonon-les-Bains in Haute-Savoie, France, will be taxed approximately 1,050 euros per year in taxe foncière.
Yearly Residence Tax (“Taxe d’Habitation”)
The yearly residence tax (“taxe d’habitation”) is paid by real estate occupiers, who occupy the premises on January 1 of the tax year.
The amount depends on income and makeup of the household. If the owner of real estate does not live there permanently, but uses it as a summer vacation home, or leaves it vacant altogether, this tax will be approximately equal to the yearly property tax. However, if the property is rented out on a permanent, or semi-permanent basis, the tenant will be responsible for the tax (holiday lettings excepted).
*The “notaire” is a public official in charge of presiding over all real estate transactions in France (and other areas of law, including property, inheritance, and family law). The notaire represents the government’s interests and is charged with making sure that the transaction is in strict conformity with the law. The notaire’s seal of authenticity makes deeds have binding force with the legal status of a final judgment. All purchase and sale of all real estate in France must pass through the notaire.
This article is intended for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.