Taxation in France: what non-residents need to know about tax rates and key rules

Buying a ski apartment in Val Thorens, restoring an old chalet near Alpe d’Huez, or letting a rental studio in Grenoble all raise the same underlying question sooner or later: how does taxation in France actually work for someone who is not French?

For international buyers, this is rarely a matter of curiosity alone. The French tax system rests on principles that can differ quite a bit from those in the UK, the US or elsewhere, and a structure that works well at home does not always translate cleanly once a French property is involved. Getting the basics right from the outset tends to save considerably more, in time and in money, than correcting things afterwards.

This guide sets out the main French tax rates relevant to property owners and investors, with particular attention to situations we see often in the Alps: second homes in ski resorts, furnished rental investments, and cross-border families building a long-term base in France.

It is written as general information rather than personalised advice. Because so much depends on your residency status, your family situation and the way a purchase is structured, it is advisable to raise your specific case with a notaire before signing anything binding. For a broader overview of the purchase process itself, see our guide to buying property in France and our page on real estate.

The French tax system at a glance

Taxation in France is organised around a handful of major categories. The table below is a starting point; several of these taxes are covered in more depth further down.

A quick note on figures: rates and thresholds are reviewed in the annual finance law, and several have moved even over the past year or two. Treat the percentages in this guide as a reliable starting point for planning, and confirm the exact figures applicable to your situation before relying on them for a transaction.

Buying property: transfer taxes and the “notary fees” question

When buying in France, most of what English-speaking buyers refer to as “notary fees” is, in fact, tax. The bulk of the amount, known as droits de mutation, is collected by the notaire but paid over almost entirely to the local département, the commune and the State; the notaire’s own regulated fee is a comparatively small part of the total.

Since April 2025, départements have been allowed to raise their share of this tax from 4.5% up to 5%, and many, though not all, have done so. As a result, the overall transfer tax on an existing (“ancien”) property now typically runs at somewhere around 5.8% to 6.3% of the price, with total closing costs, including the notaire’s fee and disbursements, landing at roughly 7% to 8.5%. Because the rate is set département by département and can change from one budget year to the next, it is worth confirming the exact figure for Savoie, Isère, Ain or wherever the property is located, rather than assuming a single national percentage applies everywhere.

New-build and off-plan (VEFA) purchases follow a different logic. VAT at 20% is already included in the sale price, and the transfer tax is replaced by a reduced land registration duty of about 0.715%. Total acquisition costs on a new-build purchase therefore usually sit around 2% to 3% of the price, a difference worth keeping in mind when comparing a resale chalet with a new-build programme in the same resort. Our dedicated guide to buying off-plan property in France goes through this process in more detail.

Example: a resale apartment in Val Thorens

Mr and Mrs Henderson, a British couple, are considering a two-bedroom resale apartment in Val Thorens at €650,000, as a second home. Because the property is existing rather than new-build, they can expect transfer taxes and notarial costs of around 7% to 8% of the price, on top of the purchase price itself — a detail that is easy to underestimate when budgeting a cross-border purchase.

Anticipating this cost early, alongside the financing structure (see our page on mortgages and loan security), is one of the reasons it helps to involve a notaire from the point an offer is being considered, rather than only once a compromis de vente is ready to sign.

Owning the property: taxe foncière, taxe d’habitation and the “second home” surcharge

Once the purchase is complete, two local property taxes typically apply.

The taxe foncière is an annual tax due by every owner, resident or not, whether the property is a main home, a second home, or let out. It funds local services, and its amount depends on the notional rental value of the property and on rates set by the commune.

The taxe d’habitation was phased out for main residences between 2018 and 2023, which sometimes leads non-French buyers to assume it has disappeared altogether. It has not: it remains due on second homes, and this is directly relevant for Alpine buyers. Since a 2023 reform, communes classed as “zones tendues” — areas where housing demand outstrips supply — can add a surcharge of between 5% and 60% on the taxe d’habitation for second homes.

This classification has been extended beyond large cities to include a number of touristic and mountain communes with a high proportion of second homes, and several well-known ski resorts fall within it. In practice, a second home in a popular resort can carry a noticeably higher taxe d’habitation bill than an equivalent property a short distance away, in a commune that has not adopted the surcharge, or is not classified as a zone tendue at all.

For a couple weighing up two otherwise similar chalets — one in a well-established resort and one in a quieter neighbouring valley — this local variation is worth factoring in alongside the more visible criteria of price and ski access.

Wealth tax (IFI): a consideration for higher-value Alpine property

The Impôt sur la Fortune Immobilière (IFI) applies once the net value of an individual’s real estate assets — French assets only for non-residents, worldwide assets for French tax residents — crosses €1.3 million. Above that threshold, rates are progressive, running from 0.5% up to 1.5%.

For buyers of prestige property in the Alps or on the French Riviera, this is often a relevant consideration rather than an exotic one: a single ski chalet can approach or exceed the threshold on its own, and several exemptions and planning tools exist — notably around primary residences and holding structures — that can reduce or reshape the liability. Because the calculation mechanics are more involved than the headline threshold suggests, our dedicated guide to wealth tax in France covers IFI in full, with worked examples.

VAT and renovation: what changes when you restore an old chalet

Many Alpine buyers are drawn to older chalets and farmhouses with renovation potential, and VAT treatment differs quite a bit depending on the type of work involved.

Example: renovating an old chalet near Alpe d’Huez

A family buys a traditional stone-and-timber chalet above Alpe d’Huez, planning a full renovation of the interior along with a new insulation scheme. Depending on how the works are organised and invoiced, part of the renovation may qualify for the reduced 10% rate rather than the standard 20%, and the energy-efficiency portion of the project for 5.5% — a distinction that can represent a meaningful saving on a large renovation budget. Getting the invoicing and contracts right from the start, rather than trying to reclassify costs afterwards, tends to make the difference between benefiting from the reduced rates and not.

Buyers of new-build or off-plan property sometimes discover, part-way through a purchase, that the 20% VAT included in the price can be reclaimed under certain rental structures. Reclaims of this kind depend on specific contractual arrangements and precise timing, and an error can lead the tax authorities to refuse the reclaim — an outcome worth avoiding, given that the amount at stake is, by definition, a fifth of the purchase price. Setting up the structure correctly before signing, rather than adjusting it afterwards, tends to matter a good deal here.

Rental income and social charges: letting a chalet or apartment

Furnished holiday lets are common across Alpine resorts, and rental income brings its own set of French tax rates into play. Beyond income tax itself, non-residents earning French rental income are also liable for social charges (prélèvements sociaux) on that income and on any eventual capital gain.

The standard rate of social charges on French property income is 17.2%. Non-residents affiliated to the social security system of an EU or EEA country, Switzerland, or the UK (under the terms agreed after Brexit) can benefit from a reduced rate of 7.5% instead, provided they are not also covered by the French social security system.

Because affiliation, rather than country of residence alone, is the deciding factor, it is worth checking this carefully rather than assuming the reduced rate applies automatically. It is also worth noting that a 2026 increase in social charges on financial investment income, from 17.2% to 18.6%, does not extend to real estate income, which remains at 17.2% or 7.5%.

We look at furnished rental structures such as LMNP and LMP, and their tax treatment, in more detail in our guide to French property rental income and taxation.

Holding property through a company: opportunities, and a trap worth knowing about

Some buyers already own a UK limited company or a US LLC and consider using it to hold a French property, often for reasons of asset protection or estate planning back home. This can work, but it brings specific French tax consequences that are easy to underestimate.

Legal entities, French or foreign, owning French real estate as of 1 January are liable for an annual tax of 3% on the property’s market value, unless a qualifying exemption applies and the relevant declarations are filed on time — for instance for entities based in the EU or in a country with an administrative assistance agreement with France. In practice, many structures do qualify for an exemption, but the paperwork has to be filed correctly and on time; missing a filing deadline means the 3% tax becomes due for that year.

There is a second, less obvious issue on resale. For individuals, capital gains tax on French property tapers off over time and reaches a full exemption after 22 years of ownership for the income tax portion (30 years including social charges). For a company, the calculation instead runs from the depreciated value of the property, so the taxable gain on sale can grow rather than shrink the longer the company has owned the asset — the opposite of what many buyers expect based on the individual regime.

A French Société Civile Immobilière (SCI) is often considered as an alternative to a foreign holding company for exactly this reason, though it comes with its own rules and is not automatically the right answer for every situation. We go through this comparison, and the wider question of using a company to buy in France, in our dedicated article on buying French property through a company, and look specifically at the pitfall described above in our guide on non-French companies and French real estate taxes. For the wider legal side of setting up and running a structure, our page on business and company law covers statutes, share transfers and ongoing compliance.

Common pitfalls: a quick reference

Getting the structure right from the outset

Because taxation in France touches property law, company law, and family and succession planning all at once, the most effective point to address it is before a purchase is signed, not after. A notaire, acting as an impartial public officer rather than a commercial adviser, can review a proposed structure — French or foreign company, direct ownership, or SCI — against your residency status, your family situation and your long-term plans, and flag anything that needs adjusting.

This is particularly relevant where several areas overlap: financing a purchase (see our page on mortgages and loan security), planning for a future transmission to children or a spouse (see our page on family law and our guide on tax and estate planning), or coordinating a purchase with an existing structure abroad.

Conclusion

Taxation in France covers considerably more ground than the headline French tax rates on income and VAT suggest, particularly for non-residents buying or investing in the Alps. Transfer taxes, local property taxes, wealth tax, VAT on renovation, social charges and corporate rules can each apply differently depending on how a purchase is structured and where the property is located.

None of this needs to stand in the way of a well-planned Alpine investment. It is simply a reason to have the structure reviewed by a notaire before committing to it, rather than after.

Contact our international team now to secure and optimize your transaction.

You can also call us :

📞+33 (0)4 7924 6222