When you own a property in France, a number of taxes apply, whether you live there or rent it out. Here are the main taxes to consider:
Property tax: an essential local tax
The taxe foncière is a local tax that all property owners must pay, whether they occupy or rent their property, and whether they live in France or not. It is calculated on the basis of the cadastral rental value of the property, and varies according to the commune. This tax is due even if the property is unoccupied.
💡 Good to know: Certain exemptions exist, notably for new housing for two years or for certain people depending on their situation (elderly, disabled, etc.).
Council tax : only for second homes
Since the reform of the taxe d'habitation, it has been abolished for principal residences. However, it remains payable for second homes. The amount varies according to the location and rental value of the property.
Public broadcasting contribution
If your property is furnished and equipped with a TV set, you must pay this fee, which is set at €138 in 2024. It is usually included in your taxe d'habitation notice.
Taxes on rental income
If you rent out your property, you must declare the rental income and pay taxes according to the system you choose:
Micro-foncier: if your annual rental income is less than €15,000, you benefit from a flat-rate deduction of 30%.
Régime réel: you deduct actual expenses (work, loan interest, co-ownership charges, etc.).
Furnished rental: rents are taxed as BIC (Bénéfices Industriels et Commerciaux), with specific regimes depending on the amount of income.
Taxation of rental income under the LMNP scheme
If you rent out your furnished property, the rents received are taxed in the Industrial and Commercial Profits (BIC) category. You have two tax options:
🔹 Micro-BIC regime: for rents below €77,700 / year
You benefit from a flat-rate allowance of 50% on your rental income (to cover expenses).
You do not deduct your actual expenses (work, depreciation, loan interest, etc.).).
This system is simple and ideal if you have few expenses to declare.
🔹 Régime Réel: to optimize your tax situation
This system allows you to deduct all actual expenses: loan interest, work, management fees, property tax, depreciation of the property and furniture.
Thanks to depreciation, you can significantly reduce your tax base and sometimes even pay no tax on rents for several years.
This regime is advantageous if you have high expenses.
📌 As a non-resident, you must declare your rental income in France, but also in your country of residence, depending on the tax treaties in force.
Social security contributions for non-residents
1. Rental income (furnished or unfurnished) :
- Since 2019, non-residents of the European Union (EU), the European Economic Area (EEA) and Switzerland are no longer subject to the standard 17.2% rate on their property income.
- Instead, they pay a reduced rate of 7.5% if they are affiliated to a social security scheme in their country of residence.
- If you live outside the EU/EEA/Switzerland, social security contributions remain at the full rate of 17.2%.
📌 Special cases:
✅ If you are under the LMNP (Loueur Meublé Non Professionnel) regime and opt for the actual regime, your income is considered as BIC (Bénéfices Industriels et Commerciaux) and is not subject to social levies.
✅ If you opt for the Micro-BIC regime, social levies may apply.
2. Real estate capital gains :
If you sell a property in France, social security contributions apply to the capital gain, depending on your country of residence:
- Non-EU/EEA/Swiss residents 👉 reduced rate of 7.5% (instead of 17.2%), if you are affiliated to a social security scheme in your country.
- Non-residents outside the EU/EEA/Switzerland 👉 full rate of 17.2%.
📌 Please note:
➡️ In addition to social security levies, an additional tax of 2% to 6% may apply if the capital gain exceeds €50,000.
➡️ You can benefit from partial or total exemptions depending on the length of time the property has been held.
Summary of cases where social security contributions are due :
| Type of income | EU/EEA/Switzerland residents | Residents outside the EU/EEA/Switzerland |
|---|---|---|
| Rental income (bare rental, LMNP Micro-BIC) | 7,5 % | 17,2 % |
| LMNP income (real regime - BIC) | ❌ Exempt | ❌ Exempt |
| Real estate capital gains | 7,5 % | 17,2 % |
💡 Tip: If you qualify for the reduced 7.5% rate, be sure to provide proof of social security coverage to avoid excessive taxation...
Vacancy tax
If your property has been unoccupied for more than a year and is located in a high-tension zone, you may be liable for the tax on vacant dwellings (TLV). The amount is calculated as a percentage of the cadastral rental value.
Transfer duties (on the purchase of a property)
When purchasing a property, the buyer must pay transfer duties (frais de notaire), which generally amount to between 7% and 8% of the purchase price for an old property, and around 2% to 3% for a new one.
Property wealth tax (IFI)
If the net value of your real estate assets exceeds 1.3 million euros, you are subject to the IFI.
In conclusion, owning property in France involves a number of tax obligations. Good management of these taxes will help you optimize your tax situation and avoid unpleasant surprises. For any particular situation, it is advisable to consult a chartered accountant, a notary or a chartered accountant specialized in non-resident taxation.
