France taxes property located on its territory, regardless of the owner’s nationality or place of residence. An American residing in New York who owns an apartment in the 7th arrondissement of Paris is taxed in France on that apartment: on its ownership (taxe fonciere), on any income it generates (rental), and on its resale (capital gains). This is the principle of territorial taxation.
This guide decodes each layer of this taxation, without jargon, but with a constant caveat: every situation is unique, bilateral tax treaties add considerable complexity, and an international tax advisor is essential to optimise your position. At Home Select, we systematically direct our international clients to competent firms. What follows is a map, not a GPS.
Taxe fonciere: identical for everyone
Let us start with the good news. The taxe fonciere, the annual tax every owner pays simply for holding a property, is exactly the same for a resident and a non-resident. No surcharge, no difference in calculation.
In Paris, the taxe fonciere varies by arrondissement, property size and its “rental cadastral value”, a theoretical calculation basis set by the tax authorities, often disconnected from real market prices. In practice, expect between 800 euros and 3,000 euros per year for a standard Parisian apartment.
The taxe fonciere is due on 1 January each year. If you buy during the year, a pro-rata temporis allocation is generally agreed with the seller at the time of signing the final deed: the notary handles this.
Point of attention: the Parisian taxe fonciere has increased significantly in recent years. The City of Paris raised the municipal rate by 52% in 2023, which resulted in a notable increase for all owners. Factor this item into your yield calculations if you are buying as an investment.
The second-home surcharge: the hidden cost
This is the item many non-residents discover after purchase. If your property in Paris is not your primary residence, which is, by definition, the case for a non-resident, you are liable for the taxe d’habitation on second homes, with a surcharge.
The standard taxe d’habitation was abolished for primary residences in France. But it remains in force for second homes. And in Paris, the municipality applies a 60% surcharge on the municipal portion of this tax.
In practice, this represents between 1,000 euros and 4,000 euros per year depending on the size and location of the property, on top of the taxe fonciere.
An exemption exists if the property is your second home for professional reasons (you work in Paris but your primary residence is in the provinces). But for a non-resident who uses their Parisian property as a pied-a-terre or for occasional stays, the surcharge applies.
If the property is rented out, the taxe d’habitation is owed by the tenant for their primary residence, or by you if the property is rented furnished on a short-term basis and you remain the tax “resident” of the dwelling.
Rental income: the 20% floor rate
If you rent out your Parisian property, the rent received is taxed in France, even if you live in Tokyo, Dubai or Sao Paulo. This is the territoriality rule: income derived from a property located in France is taxable in France.
The tax regime
As a non-resident, your French rental income is subject to a minimum rate of 20% (Article 197 A of the General Tax Code). This rate rises to 30% for the portion of net taxable income above 27,478 euros (2026 threshold).
This is a floor rate: if the progressive income tax scale were more favourable to you (which is rare for a non-resident with significant income), you could request the application of the standard scale. But in practice, most non-residents are taxed at the 20% or 30% rate.
On top of this tax rate come social levies. The rules are as follows:
- Non-residents affiliated with a social security regime in an EEA (European Economic Area) country or Switzerland: 7.5% solidarity levy.
- Non-residents affiliated with a regime outside the EEA/Switzerland: 17.2% social levies (CSG + CRDS + solidarity levy).
The difference is substantial. A British resident (outside the EU since Brexit, though specific agreements may apply: consult a tax advisor) or an American resident will pay 17.2% in social levies on top of income tax, for a total rate that can reach 37.2% to 47.2% on net rental income.
Furnished rental (LMNP) and non-residents
The Non-Professional Furnished Rental status (LMNP, Loueur en Meuble Non Professionnel) is accessible to non-residents. It is often a tax-efficient regime because it allows depreciation of the property and furniture, significantly reducing taxable income, sometimes to zero for several years.
However, LMNP for a non-resident involves filing obligations in France (BIC declaration, accounting if on the real regime) and a SIRET number. A specialist accountant is virtually essential.
Tax treaties: avoiding double taxation
You pay tax in France on your Parisian rental income. But your country of residence may also want to tax the same income, since it taxes its residents on their worldwide income.
This is where bilateral tax treaties come in. France has signed such treaties with over 120 countries. For property income, the general rule is clear: the country where the property is located (France) has the right to tax. The country of residence then grants a mechanism to avoid double taxation, either a tax credit (you deduct the tax paid in France from the tax owed in your country) or an exemption (income already taxed in France is excluded from your local tax base).
The exact mechanism depends on the applicable treaty. A few examples:
France-United States treaty. France taxes property income. The United States also taxes (American citizens are taxed on worldwide income), but grants a tax credit for the tax paid in France. The net result depends on your marginal American tax bracket.
France-United Kingdom treaty. France taxes. The United Kingdom grants a tax credit. Note the post-Brexit specificities that may affect social levies.
France-United Arab Emirates treaty. The UAE does not tax individual income, so you pay only the French tax, without any credit mechanism (since there is no local tax to offset). This is an advantageous scenario.
France-Switzerland treaty. France taxes property income. Switzerland exempts it but takes it into account in determining the rate applicable to your other income (exemption with progressivity method).
Jean Mascla’s advice: Never file your French tax return alone when you are a non-resident with property income. An international tax advisor costs between 500 euros and 2,000 euros per year for a return: that is the price of peace of mind and optimisation. Non-resident filing errors are among the most frequent and most costly to correct.
Capital gains: beware of higher rates
When you resell your Parisian property, the capital gain will be taxed in France. And this is where the resident/non-resident distinction becomes truly significant.
Calculating the capital gain
Taxable capital gain = sale price minus purchase price (plus acquisition costs and any works). Allowances for length of ownership progressively reduce the taxable base:
For income tax: 6% allowance per year from the 6th year of ownership, full exemption after 22 years.
For social levies: 1.65% per year from years 6 to 21, 1.60% in year 22, 9% per year beyond, full exemption after 30 years.
Applicable rates
Residents of the EU, EEA or Switzerland: 19% income tax + 17.2% social levies = 36.2% on the net capital gain (before allowance).
Residents of a country with a mutual administrative assistance agreement with France (which includes the United States, United Kingdom, Canada, Australia, etc.): 19% income tax + 17.2% social levies = 36.2% as well.
Residents of a country without a mutual administrative assistance agreement: the income tax rate rises to 33.33% + 17.2% social levies = 50.5%. This punitive rate applies to a limited number of countries, but it exists.
Surcharge on large capital gains: above 50,000 euros of net taxable capital gain, a progressive surcharge applies (from 2% to 6% depending on the amount). It applies equally to residents and non-residents.
Withholding at source
Non-resident capital gains tax is withheld at source by the notary at the time of sale. You do not receive the full price and then pay the tax afterwards: the notary directly withholds the tax amount and pays it to the Treasury. You receive the price net of tax.
This is a simple mechanism from the tax authority’s perspective, but it requires precise calculation beforehand. If the notary has doubts about the exact amount (works to deduct, questionable allowance), they may withhold a higher amount as a precaution. You will recover the excess via a claim, but this can take months.
Primary residence exemption
The capital gains exemption for primary residences, the provision allowing French residents to resell their main home without paying capital gains tax, does not apply to non-residents by definition (your Parisian property is not your primary residence if you live abroad).
There is, however, a partial exemption for non-residents who are EU/EEA nationals and previously resided in France: a capital gains exemption of up to 150,000 euros is possible on the first sale of a property in France, subject to conditions. This provision is valuable for French expats reselling a property acquired before their departure.
Jean Mascla’s advice: If you are a French expat within the EU and considering selling your Parisian property, check your eligibility for the 150,000 euro exemption. It is a little-known provision that can represent savings of tens of thousands of euros. An international tax advisor will confirm in a single consultation whether you qualify.
IFI: the wealth tax on real estate
The IFI (Impot sur la Fortune Immobiliere, Wealth Tax on Real Estate) replaced the former ISF in 2018. It applies to net real estate assets exceeding 1.3 million euros.
For non-residents, only property assets located in France are taken into account. Your real estate abroad does not enter the calculation. This is an important difference from French residents, who are taxed on their worldwide property wealth.
The scale is progressive:
- 800,000 euros to 1,300,000 euros: 0.50%
- 1,300,000 euros to 2,570,000 euros: 0.70%
- 2,570,000 euros to 5,000,000 euros: 1.00%
- 5,000,000 euros to 10,000,000 euros: 1.25%
- Above 10,000,000 euros: 1.50%
In practice, a non-resident who owns a 1.5 million euro apartment in Paris (net of debt) will pay approximately 2,450 euros per year in IFI. This is a manageable amount, but one to anticipate, especially if you have an ongoing loan (the outstanding principal is deductible from the property value for IFI purposes).
Point of attention: the value to declare is the market value of the property, not the purchase price. If the market has risen since your acquisition, your IFI base increases. The reverse is also true: if the market has declined, you can declare a value lower than your purchase price.
SCI for non-residents: advantages and constraints
The SCI (Societe Civile Immobiliere) is often presented as the miracle solution for non-residents. The reality is more nuanced.
The genuine advantages
Simplified remote management. Decisions are made at general meetings, formalised by minutes, which can be done remotely. This is more structured than co-ownership between individuals.
Easier estate planning. Transferring SCI shares is fiscally more flexible than transferring property directly. Donation allowances apply to shares (100,000 euros per parent and per child every 15 years), and the share value can be discounted by 10 to 15% compared to the property value (illiquidity discount).
Asset protection. The SCI isolates the property from the personal assets of the partners. In the event of personal financial difficulties, creditors do not have direct access to the property held by the SCI.
The genuine constraints
Creation cost: 1,500 to 3,000 euros (articles of association, registration, publication).
Annual accounting: 1,000 to 2,000 euros per year (accountant required in practice, even if not in theory).
Filing obligations: results declaration (Form 2072), annual general meeting with minutes, decision register.
More complex financing: banks lend less readily to an SCI than to an individual. The deposit required is often higher, and rates slightly elevated.
Income tax or corporation tax: by default, the SCI is fiscally transparent (income is taxed in the hands of the partners, at non-resident rates). Opting for corporation tax (IS) can be fiscally advantageous (property depreciation, 25% rate), but with drawbacks on resale (business capital gains, no length-of-ownership allowance).
When an SCI makes sense for a non-resident
An SCI is relevant if you are buying jointly (couple, family, partners), if you have an estate planning objective (children, succession), or if you are investing in a rental property with a long-term tax optimisation strategy.
For a simple pied-a-terre used a few weeks per year, an SCI adds complexity and cost without a decisive advantage. Buy in your own name.
Our detailed article on buying via an SCI in Paris explores each aspect of this structure.
Do you have a property project in Paris with an international tax situation? We point you to the right tax advisors: it is the first thing we do with our non-resident clients, before even launching the search. Structure your tax planning
Key takeaways
Property taxation for a non-resident in France breaks down into four layers: the taxe fonciere (identical to residents), the second-home surcharge (specific to Paris, ~60%), rental income taxation (minimum 20% rate, variable social levies depending on the country), and capital gains on resale (36.2% for EU residents, up to 50.5% without a treaty). The IFI applies above 1.3 million euros of real estate assets in France.
Bilateral tax treaties prevent double taxation, but each treaty has its own particularities. An SCI is a useful tool in some cases, costly and superfluous in others. And the golden rule remains constant: consult an international tax advisor before structuring your purchase. It is an investment of a few hundred euros that can save tens of thousands.
At Home Select, we are not tax advisors, but in fifteen years and 1,200 projects, 30% of which involved international clients, we have learned to ask the right questions and point towards the right professionals. If you are preparing to settle in, also consult our guide to administrative steps for settling in Paris. That too is the role of a property hunter who knows the international clientele. Let us discuss your project.
Frequently asked questions
Does a non-resident pay more property tax than a resident in France?
Not necessarily 'more', but differently. The taxe fonciere (property tax) is identical. However, rental income is taxed at a minimum rate of 20% (versus the progressive scale for residents, which can be lower for small incomes). Capital gains on resale are taxed at 36.2% for EU residents (19% + 17.2% social levies) and up to 50.5% for certain non-EU non-residents. The Paris second-home surcharge (60%) also applies de facto to every non-resident.
Do tax treaties prevent double taxation?
Yes, that is their primary purpose. France has signed bilateral tax treaties with over 120 countries. These treaties determine which country has the right to tax which income, and provide mechanisms to prevent the same income being taxed twice (tax credit or exemption). For property located in France, the general rule is that France retains the right to tax, but the country of residence may grant a tax credit. Each treaty has its own particularities: consult an international tax advisor.
Should you create an SCI to buy in France as a non-resident?
It is not mandatory, and it is not always advantageous. An SCI facilitates remote management and estate planning, but it has costs (creation approximately 1,500-3,000 euros, annual accounting approximately 1,000-2,000 euros) and constraints (general meetings, filing obligations). For a simple pied-a-terre used occasionally, buying in your own name is often simpler. For a rental investment or jointly-held property, an SCI is worth exploring. Consult a tax advisor before deciding.
