Introduction
Understanding transaction costs and ongoing taxes is essential when purchasing property in France. Expatriate buyers must budget for several charges at purchase and plan for recurring taxes thereafter. This guide provides essential tips for expatriate property investment France 2025, including taxes, transaction fees, and long-term planning.
Transaction costs at purchase
1. Transfer duties (droits de mutation): For an existing (older than five years) property, transfer duties are about 5.8 % of the sale price . New properties are exempt from transfer duties but subject to VAT (see below).
2. Notary fees (frais de notaire): These cover the notary’s remuneration, registration duties and miscellaneous costs. They amount to 7 – 8 % of the sale price for older properties and 2 – 3 % for new‑build properties .
3. Land registration tax (taxe de publicité foncière): Part of the notary fees, this tax can reach 5.81 % of the purchase price .
4. Value‑added tax (TVA): New properties are subject to 20 % VAT, although reduced rates may apply to social or energy‑efficient projects .
Tip: Buyers usually pay these fees on completion. Notary fees are set by law; there is little room for negotiation, but you can finance them as part of your mortgage.
Annual taxes
1. Taxe foncière (property tax): Owners of primary residences pay an annual tax based on the theoretical rental value of the property; notices are sent in September and payment is due in October . For rental properties, the owner generally pays this tax and may recover part of it through service charges.
2. Taxe d’habitation: This residence tax no longer applies to primary residences. It still applies to second homes, with bills sent in November and payment due in December . If you own a holiday home, include this cost in your budget.
3. Annual property declaration: Expatriate owners must file a yearly declaration even if the property is not rented out . Failure to comply can lead to penalties, so it is advisable to appoint a tax agent or use the online portal.
Additional considerations
• Wealth tax on real estate (IFI): If your worldwide net real‑estate assets exceed €1.3 million, you may be liable for the Impôt sur la fortune immobilière (IFI). The tax is calculated on the net value of French real estate after allowable deductions.
• Capital gains tax: Non‑residents pay capital gains tax when selling French property; exemptions and reductions apply after certain holding periods.
• Notary fee increases in 2025: Some local authorities plan to raise transfer duties by up to 0.5 percentage points in mid‑2025. Buyers completing after 1 June 2025 might therefore pay closer to 8 – 9 % in total fees. If your purchase is imminent, completing before the change could save thousands of euros.
Conclusion
French real estate remains attractive to expatriate investors, but taxes and fees are complex. Budgeting around 7 – 8 % of the purchase price for transaction costs on older properties and around 2 – 3 % on new‑builds is prudent. Remember the ongoing taxe foncière and taxe d’habitation on second homes, and consult a notary or tax adviser to ensure compliance with annual declarations and any wealth‑tax obligations. For personalised guidance, contact our team.
For personalised advice or to explore our current listings, contact us via https://www.thefrenchkey.net/contact/
Source : https://en.parisrental.com/blog/