Taxes related to real estate

Here are the taxes related to real assets as when you are buying a property in France.

When you are purchasing a property in France, the Notaire's fees, disbursements and stamp duties amount to approximately 6.5% - 7% of the purchase price (if the property is more than five years old).

For new build property, French VAT (Taxe sur la Valeur Ajoutée - TVA) is applied at a rate of 19.6% (instead of stamp duties). This tax is usually included in the purchase price. However, you would also be liable for notaire’s fees at a reduced rate of 2 to 3 % of the purchase price.

If you are financing the purchase with a French mortgage, additional Notaire’s fees will be payable, the amount of which will be known before completion depending on the charge the bank is taking on the property.

With regard to local taxes,there are three main annual local taxes known as taxe foncière and taxe d'habitation (and the TV licence payable with the taxe d'habitation).

  • The taxe foncière is a local land tax which is payable by the owner of the property. Please note that generally new build properties are exempt from this tax for the first two years commencing on 1st January following the date of their structural completion, provided the work undertaken has been declared within 90 days of its completion (forms have to be filled in and sent to the French tax office within a delay in order to benefit of this exemption – more information can be provided by contacting a French lawyer).

There is also partial (50%) or full exemption, for up to 5 years, for those new homes constructed to an energy efficiency standard that is higher than the regulations currently in force.

Furthermore, a reduction in the tax payable, or complete exoneration from the tax, is available, under some conditions, to certain groups of persons (disabled, old persons above certain age, windowed persons, etc.)

When you are purchasing a property, the vendor will be responsible for the taxe d’habitation as at the 1st January of the year and the taxe foncière will be calculated on a pro rata basis for the year. As purchaser, you will be asked to reimburse the vendor the proportion of the taxe foncière from the day of completion up to the 31st of December.

  • The taxe d’habitation is a local residential tax and it is payable by the occupier of the property. Like as the taxe foncière, a reduction in the tax payable, or complete exoneration from the tax, is available, under some conditions, to certain groups of persons (disabled, old persons above certain age, windowed persons, etc.)
  • If you also have a television then the TV licence (called the la redevance audiovisuelle), is also payable with the taxe d’habitation
    If you let out separate gîte accommodation, then you are responsible for the payment of the TV licence. You may however get some limited exemption if the gîte is only let out on a limited basis each year.

Please note that if you are granted complete exemption from payment of the taxe d'habitation, then this will also grant automatic exemption from payment of the TV licence (for more information, please contact a French lawyer).