Property Taxation

Property capital gain is the difference between the sale price and the acquisition price increased by certain costs. It is then reduced by an allowance for length of ownership, whose pace differs between income tax and social levies, up to full exemption depending on the length of ownership.

The capital gain realised on the sale of your main residence is fully exempt from tax and social levies, under Article 150 U, II-1 of the CGI. The home must be your habitual and effective residence on the day of the sale, with no condition as to length of ownership.

The non-professional furnished lessor (loueur en meublé non professionnel, LMNP) lets a furnished home without meeting the conditions for professional status set out in Article 155, IV of the CGI. Their rents come under industrial and commercial profits (BIC), taxable under the micro-BIC or the actual-expenses regime.

Income from unfurnished letting comes under rental income (revenus fonciers), taxed under the micro-foncier or the actual regime. The micro-foncier, applicable below a receipts threshold set in Article 32 of the CGI, applies a flat-rate allowance of 30%. The actual regime allows actual costs to be deducted.

A property deficit arises when the deductible costs of an unfurnished let property exceed the rents. The fraction stemming from costs other than loan interest is offset against overall income within an annual limit set in Article 156, I-3 of the CGI; the surplus is carried forward against later rental income.

Property tax on built properties is calculated on a base equal to 50% of the property's revalued cadastral rental value. This base is multiplied by the rates voted each year by local authorities (Article 1380 et seq. of the CGI). It is owed by the owner as at 1 January.

Property gifts and inheritances are subject to gratuitous transfer duties. After an allowance depending on the degree of kinship (Article 779 of the CGI) is applied, the taxable share is subject to a progressive scale (Article 777 of the CGI). The same allowance is reconstituted every 15 years.

The Malraux scheme (article 199 tervicies of the French General Tax Code) cuts income tax by 22% of the cost of restoring a building in a remarkable heritage site, raised to 30% where an approved conservation and enhancement plan covers it, within a 400,000 euro cap over 4 years, outside the general tax-relief cap.

The private landlord status, known as the Jeanbrun scheme (2026 Finance Act, article 47), lets an owner depreciate 80% of the price of a new collective-building home let unfurnished for 9 years, at a rate of 3.5% to 5.5% depending on the rent charged, within a cap of 8,000 to 12,000 euros a year. Purchases from 21 February 2026 to 31 December 2028.

Intermediate rental housing (LLI, article 279-0 bis A of the French General Tax Code) grants 10% VAT instead of 20% on a new-build home in a high-demand zone, reserved to a legal entity, an SCI or family SARL, with at least 25% social housing in the scheme. A corporate-tax credit can cover property tax for 20 years.

A new-build home bought as a main residence in an ANRU district, a priority urban policy district, or a 300-metre band around one, benefits from 5.5% VAT instead of 20%, under income caps and a 10-year occupancy commitment, otherwise a tapering VAT clawback is due (article 278 sexies of the CGI).

Buying the bare ownership of a new-build home while an institutional landlord holds the temporary usufruct, 15 to 20 years, under the social rental usufruct regime, article L. 253-1 of the Construction and Housing Code, is an investment distinct from a gift with reserved usufruct: lower notary fees, no wealth tax during the term, but no income or management until full ownership returns.

The Denormandie older-property scheme (article 199 novovicies of the French General Tax Code) cuts tax by 12%, 18% or 21% of the price depending on a 6, 9 or 12-year letting commitment, provided works make up at least 25% of the total cost. Cap of 300,000 euros and 5,500 euros per square metre. Runs until 31 December 2027.