What taxes are levied on second homes in France?

Buying a second home in France can be a big capital outlay but the costs do not stop on the day of purchase: one key factor is property-related tax.

The main ongoing tax paid by almost all homeowners is taxe foncière on built property. 

This must be paid in full by October 20 each year by the owner, even if the property is rented out. 

Ask the current owner or agent before buying the house – the amount paid can vary greatly from property to property.

Most people pay through 10 monthly direct debits from January to October, with the amount based on tax paid the year before. This allows November and December to be used for adjustments if you have paid too little or too much.

Taxe foncière exemptions do exist, but are on the whole only for residents of France. This includes owners on retirement pensions who have low incomes and who receive the Allocation de solidarité aux personnes âgées pension top-up benefit.

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There is another exemption for people aged 75 or more and who have income below certain 'modest' means thresholds. This exemption is linked to declared income in France and the ceiling varies depending on the number of people in the household.

For a one-person household the revenu fiscal de référence (RFR) in 2024, (the latest year given by the government) is €12,455 or under. For someone in a two-person household it is €19,107.

Technically, this exemption can, on request be applied to second homes as well as main homes, however to have a RFR you would have to have some French-taxable income, which is not the case for most non-resident owners of French second homes. 

One potential source of such income could be from occasionally renting out the property, but to obtain the exemption on a given property the tax office must be satisfied that it is used as your own second home. 

Taxe foncière bills are based on half of a property's notional annual rental value (VLC, valeur locative cadastrale) to which a percentage rate set by the local council is applied. 

They can vary significantly from area to area and property to property, due to local council policies. 

Some homeowners also feel their bills are unfair due to the complex way in which the VLCs are worked out.

In some cases owners of new properties, or properties where there have been planning permissions granted for extensions, may pay more than old chateaux, where the tax is essentially based on the last comprehensive revision in 1972.

An overhaul of the VLCs has long been promised (currently expected to be applied in 2028) but there is a lot of opposition to a measure which it is feared could see most people pay more.

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Other local property taxes

The taxe foncière bill includes separate taxes for rubbish collection (taxe d’enlévement des ordures ménagères) and, in some areas, a tax towards flood prevention, even if your home is situated on top of a hill.

Another key property tax is the taxe d’habitation, which is also based on the VLC and a local rate.

It was scrapped for main homes but second-home owners still have to pay. 

Like the taxe foncière, it is calculated based on buildings, including annexes such as garages. There is an exemption for residents of France who enter a care home while keeping their property.

One thing to watch out for is the effect of recent so-called ‘anti-Airbnb laws’. 

Communes in a zone tendue (area deemed under housing pressure) – mainly tourist resorts and those on the coast – can now add a surtax to taxe d’habitation on second homes. If the council opts for this, it may be anything from an additional five to 60%.

Conversely, communes in areas classified as 'rural revitalisation zones' (which cover roughly 60% of rural France) can grant exemptions from taxe d’habitation if a second home is sometimes rented out to tourists and is thus declared to the mairie as a meublé de tourisme. Exoneration is on a year-by-year basis. You would need to send paperwork to the tax office every year before December to benefit.

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Capital gains tax on homes

If you sell a second home for more than you paid for it, capital gains tax applies.

For properties not classed as a main home, gains are taxed at 19% for amounts up to €50,000. 

After this, surcharges of between 2% and 6% apply. Social charges are an additional 17.2%, reduced to 7.5% for residents in the UK, EU and EEA or Switzerland or residents of France with S1 forms from these countries to pay for their French healthcare. 

France also operates a taper relief according to length of ownership which can reduce the liability.

The gain is gradually reduced for tax purposes to the point where it becomes fully exempt from tax after 22 years of ownership. After 30 years it is also exempt from social charges.