New French Property Tax for Non-Residents 2026: Complete Guide

The Multi-Layer Tax System For Non-Resident Property Owners

French property taxation isn't a single tax. Non-residents face multiple overlapping taxes at different stages: purchase, ownership, rental, and sale. Understanding each layer prevents costly surprises.

Capital Gains Tax: The 19% Flat Rate

For non-residents, the total capital gains tax rate can reach up to 36.2% when selling property, while for EU/EEA citizens it is around 26.5% (19% plus reduced social contributions). The core capital gains tax on property sales stands at 19% flat rate for all sellers regardless of residency, plus social charges.

This represents a significant difference from French residents who benefit from reduced rates depending on ownership duration. As a non-resident, you get no holding period discounts. Whether you sell after one year or ten years, the capital gains tax rate remains flat.

Rental Income Tax: Minimum 20% Plus Social Charges

Non-residents are subject to a minimum tax rate of 20%, plus social taxes known as CSG CRDS at a rate of 18.6% as of 2026 (7.5% for people affiliated to the social security system of another EU member state). This means your effective tax on rental income can exceed 38% if you're outside the EU/EEA.

All rental income must be declared regardless of amount—there's no minimum threshold. Non-residents pay income tax at minimum rates of 20% up to €29,315 and 30% above that threshold, plus 18.6% social charges. These rates apply whether you rent unfurnished, furnished, or through tourist platforms.

Annual Property Taxes: Taxe Foncière And Taxe d'Habitation

Non-resident landlords and second home owners remain fully liable for the Taxe Foncière, while the Taxe d'Habitation was abolished for main homes in 2023 but applies to second homes.

Taxe foncière varies significantly by commune with no national standard rate. Expect approximately €800-€3,000 annually for most vacation homes based on property value and location. The amount depends on your commune's rate and the property's cadastral rental value, not its market value.

Taxe d'habitation on second homes includes potential surcharges. Some areas add 5-60% surcharges for housing shortages, making it impossible to predict costs without checking your specific municipality.

👉 Demandez votre devis gratuit en - de 3 mins.

IFI: The Wealth Tax On Property Over €1.3 Million

If the value of purchased property exceeds €1.3 million, French law provides the luxury tax IFI (impôt de solidarité sur la fortune), at a progressive rate of up to 1.5% of the cost of housing.

If you are not tax resident in France, IFI generally applies only to your French real estate holdings, while if you become tax resident, IFI generally applies to your worldwide real estate assets. This creates a significant incentive: non-residents avoid IFI on international properties entirely.

Purchase Costs For Non-Resident Buyers

When acquiring French property, budget substantially beyond the purchase price. Registration duties (droits de mutation) are generally 5%–6% of the purchase price for existing properties. Notary fees are approximately 7%–8% for resale property, and around 2%–3% for new builds.

VAT (TVA) applies to new-builds and off-plan properties, at the standard rate of 20%. In certain investment cases (e.g. furnished tourist residences), part of the VAT may be recovered.

For practical examples: Buying a resale property worth €200,000 expects roughly €14,000 in notary fees and registration costs. Buying a new-build apartment worth €200,000 adds €40,000 VAT (20%), though in some cases this can be reclaimed if the property is rented furnished.

New Investment Opportunities: The Jeanbrun Regime

Significant news for non-resident investors: France has revived property amortisation for the first time in a generation. The new Jeanbrun (Relance logement) regime lets landlords - residents and non-residents alike - write down up to 80% of a flat's price against their rental income.

This depreciation allowance dramatically improves rental property economics by reducing taxable rental income through property expense deductions. Non-residents can now legitimately lower their tax burden through proper structuring.

Double Taxation Protection

Double taxation treaties with more than 120 countries help prevent being taxed twice on the same income. If your home country taxes French rental income, you typically claim credits for French taxes paid, avoiding double taxation.

Strategic Structuring Options

Creating a family company (SCI) offers tax advantages. There is a legal way to avoid paying luxury tax in France by having a residence in the country. It is necessary to register your property with a legal entity, a family company SCI, where family members will have shares not exceeding the limit of €1.3 million.

SCIs allow splitting property ownership across multiple shareholders while maintaining control, potentially reducing individual IFI exposure.

FAQ - French Property Tax Non-Residents

Do EU citizens pay different taxes than other non-residents?

Yes, EU/EEA citizens benefit from reduced social charges (7.5% instead of 18.6%) if properly registered with their home country's health system. This can save thousands annually on rental income tax. Non-EU citizens pay the full 18.6% social charge rate.

Can I deduct mortgage interest on my French tax return as a non-resident?

Non-residents cannot deduct mortgage interest on their personal French tax returns. However, if your property is held through a rental business structure (LMNP), you may deduct interest as a business expense.

Is the €1.3 million IFI threshold per property or total?

The threshold is total net value across all properties. If you own three apartments worth €500,000 each, your total of €1.5 million exceeds the threshold, and you pay IFI on the entire amount.

How do double taxation treaties work with France?

You declare rental income in both France and your home country. Your home country typically allows a foreign tax credit for taxes paid in France, preventing double taxation. Some bilateral treaties offer reduced rates.

Can I change my tax regime after renting the property?

Switching from unfurnished (louage) to furnished (meublé) rental has significant tax implications and changes your taxation regime. Consult a tax advisor before making this decision, as once changed, reverting can be complicated.

Non-resident property ownership in France involves complex, multi-layered taxation. French tax rules change frequently and individual circumstances vary, making professional guidance essential. The 2026 increases in social charges and new depreciation opportunities require careful planning to optimize your investment returns while ensuring full compliance.