Purchase, sale, rental, investment: every real estate project comes with specific taxation that can weigh on your budget or, conversely, offer optimization opportunities.
Between local taxes, capital gains, rental regimes, and tax relief schemes, the tax framework changes every year.
This complete guide helps you understand real estate taxation in 2026 and make the right decisions for your property.
For a smooth real estate purchase or sale project, your Optimhome advisor supports you at every stage and can provide a professional property valuation if needed.
What Is Real Estate Taxation in France?
Real estate taxation refers to all taxes, duties, and levies that apply to owning, renting, buying, and selling property in France. Whether you own a main residence, invest in rental property, or are buying a property, you are directly affected by this tax framework.
This system is based on several major tax categories. Local taxes, such as property tax, are paid each year by owners. Rental income generated from letting property is subject to income tax. On resale, capital gains may be taxed, with allowances depending on the holding period. Significant real estate assets are subject to the real estate wealth tax (IFI), and every acquisition involves transfer duties.
This taxation changes regularly. In 2026, several measures were adopted to encourage rental investment and support energy renovation. Understanding these mechanisms allows you to anticipate the tax costs linked to your real estate assets and identify suitable optimization schemes.
What Taxes Apply to a French Property?
When you own property in France, several taxes apply. Some are recurring, while others arise at the time of purchase or sale. Here are the main tax charges affecting owners in 2026.
Property Tax and the New Tax for Owners
Property tax is the essential local tax for every owner. It applies every year to built and unbuilt properties, and its amount varies depending on your municipality and département.
The calculation is based on the cadastral rental value of your property, meaning the theoretical rent your property could generate if it were rented out. This base is multiplied by the rates voted by local authorities. In 2026, property tax automatically increases by 0.8% to account for inflation.
A reform to update cadastral rental values has been suspended until spring 2026.
Since 2023, the “Manage My Real Estate Properties” service on impots.gouv.fr allows owners to declare the occupancy status of their properties online. This process helps update your situation with the tax authorities.
Real Estate Wealth Tax (IFI)
The real estate wealth tax applies to owners whose net real estate assets exceed €1.3 million on January 1 of the tax year. This threshold applies to real estate assets and rights held in France and abroad.
To calculate your net taxable assets, subtract property-related debts, such as outstanding loans and works, from their total value. Your main residence benefits from a 30% allowance on its value.
IFI is applied according to a progressive scale, with rates from 0.50% to 1.50% depending on the asset bracket. You must declare your IFI every year at the same time as your income tax return, online at impots.gouv.fr.
Registration Duties When Buying or Reselling
When you buy a property, you must pay notary fees, which mainly include registration duties.
For an existing property, these duties vary between 5.09% and 5.80% of the purchase price depending on the département, plus the 0.10% real estate security contribution. In total, notary fees represent around 7% to 8% of the purchase price for existing property. For a new-build property, the duties are reduced to 2% to 3%, because VAT already applies to the sale price.
When reselling, if you sell your main residence, you are fully exempt from capital gains tax. For a second home or rental property, you will be taxed on the capital gain unless you have owned the property for more than 22 years for income tax and 30 years for social security contributions.
What Taxation Applies to Rental Investment in France?
Investing in rental property commits you for several years, and the choice of tax regime can significantly affect your net profitability. In 2026, taxation depends on the type of rental: unfurnished or furnished. Each option has its own tax rules and optimization levers.
Unfurnished Rental: Micro-Foncier or Actual Regime
When you rent out an unfurnished property, your rental income is taxed as property income. Two regimes are available.
If your annual rents do not exceed €15,000, you fall under the micro-foncier regime. You benefit from a flat-rate allowance of 30% on gross income. Only 70% of your rents are taxable, without needing to justify actual expenses.
Above €15,000, or by option, you switch to the actual regime. You deduct all your expenses: maintenance work, loan interest, insurance premiums, management fees, and property tax. If your expenses exceed your income, you generate a property deficit deductible from your overall income up to €10,700 per year. Any excess can be carried forward for ten years.
Furnished Rental: Micro-BIC or Actual Tax Regime
Furnished rental falls under industrial and commercial profits (BIC). Your status depends on your income: non-professional furnished landlord (LMNP) or professional furnished landlord (LMP).
Under LMNP, if your annual receipts remain below €23,000 and do not exceed your other professional income, you can choose the micro-BIC regime. You benefit from a 50% flat-rate allowance on rents, or 71% for classified tourist furnished accommodation within the €83,600 limit. No expenses are deductible.
If your receipts exceed these thresholds or if you want to optimize your taxation, choose the actual regime. You deduct all your expenses and depreciate the property and furniture over several years. This depreciation significantly reduces your taxable result, often to zero for many years.
In 2026, the rules applicable to tourist furnished rentals changed, with stricter revenue thresholds and reporting obligations. To learn more, see our article on the new private landlord status in 2026.
Tax Advantages of New-Build Rental Property
Investing in new-build property offers specific tax relief levers, particularly the Jeanbrun scheme introduced by the 2026 Finance Act. This mechanism allows you to depreciate up to 80% of the acquisition price of a new property or renovated older property for tax purposes. Depreciation generates a property deficit deductible from your overall income.
To qualify, you must rent out the property for at least 9 years and comply with rent ceilings and tenant income limits. The scheme applies to properties acquired between February 21, 2026 and December 31, 2028.
The property deficit ceiling deductible from overall income has been temporarily doubled, rising to €21,400 per year until December 31, 2027. This measure helps finance major renovation works.
Here is a comparison table to better visualize the differences between unfurnished and furnished rental:
Criterion | Unfurnished rental | Furnished rental (LMNP) |
|---|---|---|
Tax regime | Property income (income tax) | Industrial and commercial profits (BIC) |
Micro-regime threshold | €15,000 (micro-foncier) | €23,000 (micro-BIC) or €83,600 (tourist furnished rental) |
Flat-rate allowance | 30% (micro-foncier) | 50% (micro-BIC) or 71% (classified tourist furnished rental) |
Deductible expenses | Yes under actual regime: works, interest, insurance | Yes under actual regime: expenses + property depreciation |
Tax status | Landlord | LMNP or LMP depending on receipts and activity |
How Is French Real Estate Capital Gain Calculated?
Real estate capital gain is the profit made when you sell a property for more than you paid for it. Understanding how it is calculated and taxed helps you anticipate your tax obligations. Here are the key points for 2026.
Calculating the Capital Gain: Sale Price and Purchase Price
The calculation is based on a simple formula: sale price minus adjusted purchase price. The sale price is the amount received during the transaction. The purchase price may be increased by certain deductible costs.
You may deduct acquisition costs, such as notary fees and registration duties, either for their actual amount or as a flat rate of 7.5% of the purchase price. Improvement works carried out by a company are deductible upon presentation of invoices. If you have owned the property for more than five years and have no supporting documents, you may apply a flat rate of 15% of the purchase price.
Example: you sell an apartment for €300,000 that you bought for €200,000. Applying the 7.5% flat rate for acquisition costs (€15,000) and 15% for works (€30,000), your adjusted purchase price is €245,000. The gross capital gain is €55,000. To learn more, see our method for calculating real estate capital gains.
Tax Allowance Based on Holding Period
How long you have owned the property plays a decisive role in taxation. Progressive allowances apply differently to income tax and social security contributions.
For income tax, the allowance is 6% per year of ownership from the 6th to the 21st year, then 4% in the 22nd year. You benefit from full exemption after 22 years of ownership.
For social security contributions (17.2%), the scale is different: 1.65% allowance per year from the 6th to the 21st year, 1.60% in the 22nd year, then 9% per year thereafter. Full exemption applies after 30 years.
Here is a summary table of allowances:
Holding period | Income tax allowance | Social security contribution allowance |
|---|---|---|
Less than 6 years | 0% | 0% |
From 6 to 21 years | 6% per year | 1.65% per year |
22nd year | 4% | 1.60% |
Beyond 22 years | Full exemption | 9% per year |
Beyond 30 years | Full exemption | Full exemption |
Main Residence Exemption
The sale of your main residence benefits from full capital gains tax exemption, with no minimum holding period. This exemption covers both income tax and social security contributions.
To qualify, the property must be your usual and actual main residence on the date of sale. If you have already left the property, you may still benefit from the exemption provided the sale takes place within a normal timeframe, generally one year.
Immediate and necessary annexes such as a garage, cellar, or service room sold at the same time as the main residence are also exempt, provided they are located within one kilometer.
Second Homes and Non-Residents
For second homes and rental properties, the capital gain is taxable at an overall rate of 36.2%: 19% for income tax and 17.2% for social security contributions. These rates apply after deduction of holding-period allowances.
If your net taxable capital gain exceeds €50,000, a progressive surtax applies, from 2% to 6%.
French tax non-residents are subject to the same tax rules and benefit from the same holding-period allowances, but may be subject to specific levies depending on international tax treaties.
How Can You Optimize Your French Taxation Through Tax Schemes?
Real estate taxation changes every year, and 2026 is no exception. After the end of Pinel, new tax levers have appeared to support owners and investors. Several schemes remain available to reduce your tax burden or maximize the profitability of your investment.
Tax Relief Schemes in 2026
The year 2026 marks a turning point with the arrival of the Jeanbrun scheme, also called private landlord status. This new framework replaces Pinel and works on a depreciation principle: you can deduct up to 80% of your property’s purchase price from your rental income, spread over 20 years. The tax advantage varies according to the rent level applied.
The property deficit remains a strong lever for owners of unfurnished rental properties. By carrying out renovation work, you generate a deficit deductible from your overall income, up to €10,700 per year, or temporarily €21,400 for certain works.
Non-professional furnished rental (LMNP) remains attractive in 2026. The actual regime allows you to depreciate the property and furniture, significantly reducing the taxable base. Energy renovation aid, such as MaPrimeRénov’ and adaptation tax credits, offers a double advantage: improving the property’s performance while reducing taxation.
Tax Optimization Through a Real Estate Civil Company
A real estate civil company (SCI) is a powerful wealth management tool for managing and transferring your properties. It offers substantial tax flexibility: you can choose between income tax (IR) or corporate tax (IS).
Under income tax, the SCI benefits from tax transparency, which is ideal for family projects and long-term ownership. Each partner is taxed on their share of property income, with the possibility of creating a property deficit. Under corporate tax, the SCI can deduct more expenses, such as depreciation and provisions, and retain profits without immediate taxation.
The SCI facilitates wealth transfer. You can make gifts of company shares while benefiting from renewed allowances every 15 years. The split ownership strategy, separating bare ownership and usufruct, makes it possible to optimize transfer while retaining use of the property.
Changes in Tax Law and Their Impact
The 2026 Finance Act, enacted on February 19, introduces several measures affecting real estate. Beyond the Jeanbrun scheme, it strengthens obligations for landlords in terms of energy performance and property declarations through the “Manage My Real Estate Properties” service.
Rent ceilings in high-demand areas remain regulated. The new private landlord status imposes tenant income ceilings and intermediate, social, or very social rent levels depending on the chosen commitment.
The tax framework for tourist furnished rentals is tightening. Tourist furnished rentals are subject to automatic transmission of income by platforms. Energy renovation remains a priority, with aid maintained to encourage housing performance and meet EPC requirements.
Why Use a Real Estate Tax Specialist?
Real estate taxation is a technical area that changes every year. If you manage real estate assets or carry out a rental investment, using an expert can help you avoid costly mistakes and maximize your tax advantages.
The Role of an Accountant in Real Estate Taxation
An accountant mainly intervenes when your tax filings become complex: non-professional furnished rental (LMNP), real estate civil company (SCI), or the actual tax regime.
Their expertise allows you to optimize taxation by identifying all deductible expenses, calculating depreciation for your property and furniture, and securing your annual declarations. With their support, you remain compliant with the tax authorities while reducing your tax burden. Accounting fees are deductible from your property income.
Tax Lawyer to Secure Your Operations
A tax lawyer intervenes in more sensitive or contentious situations. If you are subject to a tax audit, if you are considering complex wealth structuring, or if you dispute a tax reassessment, their role is to defend your interests before the administration.
Unlike an accountant, who handles day-to-day compliance, a tax lawyer analyzes the legal consistency of your operations and protects you in the event of a dispute. They also advise you in advance on wealth planning decisions, gifts, or restructuring to anticipate tax risks.
Advice and Training to Better Manage Your Assets
Training in real estate taxation is becoming a real asset for investors. Many training options exist to understand the mechanisms of property deficit, LMNP, or real estate capital gains, and to make informed decisions.
At Optimhome, our real estate advisors support you through every stage of your project: property valuation, listing, and guidance toward the right professionals. Do you want to sell a property, optimize your rental investment, or receive personalized advice? Contact an Optimhome advisor for tailored support and to secure your real estate project.
Frequently Asked Questions About Real Estate Taxation in France
How Long Must You Keep a French Property to Avoid Paying Capital Gains Tax?
To benefit from full income tax exemption, you must keep your property for at least 22 years. The allowance starts from the 6th year of ownership and increases each year until reaching 100% after 22 years. For social security contributions, full exemption applies after 30 years of ownership. Note that your main residence is exempt with no minimum holding period, provided you actually occupy it on the date of sale.
Do You Have to Declare the Sale of a Property to the French Tax Authorities?
Yes, every property sale must be declared to the tax authorities. In most cases, your notary handles this by completing form 2048-IMM-SD and calculating any capital gain. This document is sent to the land registration service within one month after signing the deed. You can also update the occupancy status of your properties through the “Manage My Real Estate Properties” service to simplify administrative procedures. To learn more, see our guide on declaring the sale of a property to the tax authorities in 2026.
What Taxation Applies to a Property Gift After Age 80?
You can make a property gift after age 80, but tax advantages are reduced. Standard allowances between parents and children (€100,000 every 15 years) or between grandparents and grandchildren (€31,865) remain applicable regardless of your age. However, if you choose to give bare ownership, the taxable value of the property is reduced by 30% between ages 71 and 80, lowering gift tax. After age 80, this advantage disappears. It is recommended to plan your asset transfer in advance to optimize taxation.
What Are the New Real Estate Laws in 2025 and 2026 in France?
The Pinel scheme ended and was replaced by the Jeanbrun scheme, which applies throughout France without restrictive zoning. Tourist furnished rentals are subject to stricter tax rules, particularly through automatic transmission of income by platforms. Finally, energy renovation remains a priority, with aid maintained to encourage housing performance and meet EPC requirements.
What Is a French Real Estate Tax Audit?
A real estate tax audit is a review by the tax authorities of the compliance of your declarations related to your properties. It may concern your rental income, capital gains, or assets subject to IFI. Risk situations include omitting rental income, especially seasonal income, or inconsistencies between your assets and declared income. To prepare, keep all supporting documents such as leases, rent receipts, works invoices, and notarial deeds, and ensure your tax declarations are consistent.
Author :
Fabrice DOBROWOLSKI - Optimhome Network Development Director
Optimhome offers you personalized support for your real estate project. Benefit from all my advice, based on several years of experience, to ensure the success of your project.
