French Property Taxes for Foreign Owners
The house in Normandy was the easy part. The surprise comes a few months later, in the form of a French tax notice nobody mentioned during the viewings. Owning property in France as a foreign resident means paying tax on it every year, and a substantial bill on the day you sell. For an owner based in the United States, the French property is legally a résidence secondaire, a second home, whatever you call it at home, and that status removes almost every tax advantage reserved for a main residence. This guide covers what you pay while you own the house. The taxes due on purchase are part of the buying costs, set out in our guide to buying property in France as a foreigner.
In brief
- Taxe foncière, the property tax, is due every year by whoever owns the house on 1 January.
- Taxe d’habitation was abolished on main homes but still applies to second homes, with a surcharge of up to 60% in many communes.
- IFI, the real estate wealth tax, applies above €1.3 million of net French property, at rates from 0.5% to 1.5%.
- On resale, the gain is taxed at 36.2%: 19% income tax plus 17.2% social charges.
- Income tax on the gain disappears after 22 years of ownership, social charges after 30.
Why the tax office sees a second home, whatever you call it
French tax law knows only two kinds of home, the résidence principale and the résidence secondaire, with nothing in between. It does not matter that you spend five months a year in Brittany and think of it as home. Your main residence is where you live most of the year, which for a US-based owner is your American address, and the French house is therefore a second home by definition.
The distinction is not a technicality. A main residence escapes capital gains tax entirely when sold and benefits from a 30% reduction in value for the wealth tax. A second home enjoys neither, and almost everything that follows flows from that single classification.
Taxe foncière, the tax that follows the deed
The taxe foncière is the closest French equivalent to an American property tax. It falls on whoever owns the property on 1 January of the tax year, even if the house is sold a few weeks later, which is why the notaire usually splits it between buyer and seller at completion.
Its amount rests on the cadastral rental value, an administrative figure with little connection to real market rents, multiplied by rates voted each year by the commune and its intercommunality. The result is that two comparable houses a few kilometres apart can carry very different bills, and that the same bill can climb from one year to the next as both the base and the local rates are revised. The good news is that it is never a mystery: the current amount appears on the avis de taxe foncière, and you should ask to see it before making an offer.
Taxe d’habitation: abolished, except for you
This is the tax that surprises foreign owners most. France abolished the taxe d’habitation, a residence tax comparable to British council tax, on main homes. It kept it for second homes, under the name taxe d’habitation sur les résidences secondaires.
The sting is in the surcharge. Communes facing housing pressure can increase that tax by 5% to 60%, and since 1 January 2024 the same option has been open to communes with a high proportion of second homes. In other words, the charming coastal and tourist towns that attract foreign buyers are precisely those most likely to apply it. A house in a commune that charges the full 60% surcharge and an identical one in the next village that charges nothing are not, over twenty years, the same purchase.
IFI, the wealth tax on French real estate
France abolished its general wealth tax in 2018 and replaced it with the Impôt sur la Fortune Immobilière, which targets real estate alone. Non-residents are liable only on their property situated in France, not on what they own elsewhere.
The tax applies once net taxable French real estate exceeds €1,300,000 on 1 January, and it is then calculated on a progressive scale that starts from €800,000:
| Net taxable value | Rate |
|---|---|
| €800,001 to €1,300,000 | 0.50% |
| €1,300,001 to €2,570,000 | 0.70% |
| €2,570,001 to €5,000,000 | 1% |
| €5,000,001 to €10,000,000 | 1.25% |
| Above €10,000,000 | 1.50% |
A reduction softens the threshold for estates between €1.3 and €1.4 million. The 30% allowance on value, however, is reserved for a main residence, so your French house is assessed at its full market value. Debts linked to the purchase, such as a French mortgage, can in principle be deducted, under conditions.
The bill on the day you sell
This is the largest figure, and the one most owners discover too late. When you sell a second home in France, the net gain is taxed at 19% income tax plus 17.2% social charges, a combined 36.2%, before any allowance for how long you have owned the property.
Those allowances arrive slowly. Nothing happens during the first five years. From the sixth year, the income tax portion falls by 6% a year until the twenty-first, then by 4% in the twenty-second, which brings full exemption after 22 years. Social charges follow a slower path: 1.65% a year from the sixth to the twenty-first year, 1.60% in the twenty-second, then 9% a year until full exemption after 30 years. On top of this, a surtax of 2% to 6% applies when the taxable gain exceeds €50,000.
For a house bought and resold within a decade, the practical consequence is clear: expect close to the full rate. Residents of the European Union pay a reduced 7.5% solidarity levy instead of the 17.2% social charges, but US residents do not, and non-EU sellers generally have to appoint an accredited tax representative when the sale price exceeds €150,000.
The American side of the equation
The United States taxes its citizens on worldwide income, wherever they live, so a gain on French property is potentially taxable in both countries. The tax treaty between France and the United States and the US foreign tax credit exist to prevent double taxation, but how French social charges are treated on the American return is a genuinely technical question.
We are property hunters, not tax advisers, and we will not pretend otherwise. The advice we give every American client is the same: bring a cross-border tax adviser in before signing the compromis de vente. Whose name goes on the deed, whether the property is held jointly, or through a French property company such as an SCI, are decisions that cost little at the start and a great deal to undo later.
Keeping the bill under control
The most effective lever is the simplest: compare the taxe foncière and the second-home surcharge between communes before choosing a house, because both are permanent costs attached to the address. The second is administrative discipline. Every invoice for qualifying improvement works increases the acquisition price used to calculate your gain, and thirty years of receipts can be the difference between a modest bill and a painful one.
The third is to think in decades. Between purchase costs on the way in and capital gains tax on the way out, a French second home is a poor short-term investment and a reasonable long-term one. And taxes are only part of the annual budget: heating, maintenance and someone to look after the house in your absence are covered in our page on second home management in France.
Put the real figure on the table
None of this is an argument against buying. It is an argument against buying without the full annual cost in front of you, which is what most foreign buyers do. When we run a search, the taxe foncière, the local surcharge and a realistic running cost sit in the comparison next to the asking price, because two houses at the same price are rarely the same purchase.
For the rest of the decision, see our guide to buying a second home in France. Our local teams can tell you what a given commune actually charges.
Sources
Official French government guidance on capital gains on real estate and on the calculation of the IFI is published by Service-Public.fr, in French. Tax rules are given as of 2026 and are revised by each finance act: confirm your own situation with a qualified adviser before acting.
