First published June 2023
Updated August 2025
Owning a holiday home in France continues to be a dream for many foreigners. Whether it’s a stone farmhouse in the Dordogne or a coastal retreat on the French Riviera, the appeal of a second residence in France is timeless. But before you start shopping for croissants and countryside views, there’s one critical element to consider: French tax.
This comprehensive guide explains everything you need to know about French taxes when buying in France, owning, or selling your French holiday home. From capital gains tax to the often-overlooked taxe d’habitation, we’ll walk you through what expats need to know.
Table of Contents
Understanding French tax rules for second residences
If you’re buying a holiday home in France, you’ll be classed as a non-resident property owner unless you relocate full-time. This means your second home is treated differently from a primary residence under French tax law.
British and American expats with French property must navigate several taxes and reporting obligations. Even if you’re not living in France full-time, owning property here makes you liable for certain French taxes.
Key tax considerations include:
- Property taxes
- Income tax (if you rent out the property)
- Capital gains tax when selling
- Wealth tax (for high-value properties)
Taxes when buying a holiday home in France
When buying in France, buyers must budget for more than just the purchase price. Expect to pay around 7–8% in notaire fees and taxes (lower for new builds), plus any agency and mortgage fees.
Additional costs to plan for:
- Notaire fees (mandatory for all property transactions)
- Stamp duty (droit d’enregistrement)
- Currency exchange fees, especially if transferring funds from the UK or US
🔗 Learn more: Understanding Notaire Fees in France
Annual property taxes for holiday homes
Even if you only use the property part-time, you’ll still need to pay local property taxes:
Taxe Foncière
This is the land/property ownership tax, payable annually by the owner. The amount depends on the location, size, and features of the property.
Taxe d’Habitation (Still applies to second homes)
Although the taxe d’habitation has been abolished for primary residences, it still applies to second homes in 2025. This tax can vary greatly by commune and is often increased for non-resident owners in high-demand areas.
🔗 Read more: What is the Taxe d’Habitation in France?
Capital Gains Tax (CGT) when selling your French holiday home
If you decide to sell your French property, you may be liable for Capital Gains Tax (CGT) on any profit from the sale.
Key CGT considerations for non-residents:
- The standard CGT rate in France is 19%, plus social charges of 17.2% (though these may be reduced to 7.5% for UK/US residents).
- Exemptions may apply if you’ve owned the property for over 22 years (full exemption from CGT after 22 years and social charges after 30 years).
- You can deduct costs like renovation work, notary fees, and agency commissions (with proper documentation).
For British and American sellers, it’s essential to work with a French tax representative when selling a property over 150,000 €.
Wealth Tax: IFI in France
High-net-worth individuals may also be subject to Impôt sur la Fortune Immobilière (IFI), the French real estate wealth tax.
This applies if your total real estate assets in France exceed 1.3 € million. Only real estate assets (not global wealth) are considered for non-residents.
IFI is calculated based on the net value of your French properties after deducting eligible debts such as mortgages.
Renting out your French holiday home
If you rent out your second residence in France, whether short-term on Airbnb or long-term, you must declare the income and may owe French income tax.
Rental income must be reported to the French tax authorities, and different rules apply depending on whether it’s:
- Furnished or unfurnished
- Short-term seasonal rentals or long-term leases
UK and US residents can benefit from tax treaties that prevent double taxation, but it’s essential to understand both local and international tax implications.
Double taxation treaties for UK and US expats
France has tax treaties with both the UK and the US to avoid double taxation. This ensures you won’t be taxed twice on the same income or capital gain.
That said, you’re still required to declare French income or assets to your home country’s tax authorities, especially in the US, where global income reporting is mandatory.
Consulting a cross-border tax advisor is strongly recommended to optimise your tax situation.
French second residence vs. primary home: What’s the difference?
In French tax law, your primary residence is where you live the majority of the year. A second residence in France is used occasionally or for holiday purposes.
This distinction affects:
- Your eligibility for tax exemptions (e.g., taxe d’habitation still applies to second homes)
- Capital gains exemptions on sale
- Your healthcare and residency rights if you eventually relocate
Where do most British and American buyers purchase in France?
British and US buyers are drawn to regions that offer charm, affordability, and strong expat communities. Top choices include:
- Dordogne and Charentes for countryside living
- Occitanie for good weather and value
- Bordeaux and Nice for city and coast access
FAQ: French tax and holiday homes
Do I have to pay tax in France if I don’t live there full-time?
Yes. If you own a second home in France, you must pay annual property taxes like taxe foncière and taxe d’habitation, even if you only visit occasionally.
Will I owe tax when I sell my French holiday home?
If you make a profit on the sale, you may owe capital gains tax. The rate depends on how long you’ve owned the property and whether you’re eligible for exemptions.
How can I avoid double taxation between France and the UK/US?
France has double tax treaties with both countries. These treaties prevent double taxation but require proper declaration and coordination with tax professionals in both countries.
Is the taxe d’habitation still charged in 2025?
Yes, for second homes only. Primary residences are exempt, but if your French property is a holiday home, you will continue to pay taxe d’habitation.
Do I need to file a French tax return if I rent out my holiday home?
Yes. Any rental income from a French property must be declared to the French tax authorities, even if you’re a non-resident.
Final notes
Owning a second residence in France can be a fantastic investment and lifestyle choice, but it’s vital to understand the associated French tax obligations. From buying to selling, and even simply holding property, taxes like the taxe d’habitation, CGT, and wealth tax can impact your financial planning.
Stay compliant, plan ahead, and work with qualified professionals to make your French holiday home dream a stress-free reality.
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