Understanding Taxes on a Second Home in France: The 2025 Perspective

Owning a second home in France is a dream for many. Whether for idyllic retreats in Provence, investment in Parisian real estate, or a getaway along the Côte d’Azur, acquiring a French property brings both pleasure and responsibility. Chief among these responsibilities are taxes — a crucial aspect that second-home owners must navigate, especially as new rules and regulations unfold in 2025. In this comprehensive guide, our experts at IMMO ABROAD explain everything you need to know about taxes on a second home in France for 2025. We examine tax categories, calculation methods, payment schedules, recent reforms, and strategic tips to optimize your fiscal situation securely and legally.

Defining 'Second Home' in French Tax Law

Before delving into the specifics of French taxation, it’s essential to establish what qualifies as a “second home” in the eyes of the law. In France, a second home (“résidence secondaire”) is a dwelling that is not your primary residence. This includes holiday homes, pied-à-terre apartments, or any property where you do not reside on a permanent basis. The distinction is crucial because different rules for taxes and exemptions apply, and these rules will undergo essential developments in 2025.

Residency and Tax Status

• French Residents: Residents are taxed on their worldwide income and assets, including any second homes they own within or outside France.
• Non-Residents: Non-resident owners are generally taxed only on income and capital gains arising in France, and on French property holdings.

Every property owner must declare the status of their property to French tax authorities. Misclassification can result in penalties or missed exemptions, highlighting the importance of correct reporting.

The Main Types of Taxes on a Second Home in France

There are several categories of taxes associated with owning a second home in France. These taxes can be broadly classified into the following:

1. Taxes on Acquisition: Duties and fees payable when you purchase a property.
2. Ongoing Local Property Taxes: Taxes charged annually, reflecting your continued ownership.
3. Wealth Tax (IFI): A tax on the total value of real estate holdings above a certain threshold.
4. Income Tax: Although a second home does not generate rental income by default, taxation may apply if the property is rented.
5. Capital Gains Tax: Taxes applied upon the sale of the property, calculated upon the gain realized.

This article will detail each tax type, explain changes coming in 2025, and offer strategic advice for optimization.

Taxes on Acquisition: The First Step in French Homeownership

Notary Fees and Registration Duties ("Frais de Notaire")

Upon purchasing a second home in France, one of the first financial obligations is the so-called “frais de notaire”. Despite the name, this sum encompasses both the notary’s professional fees and a variety of taxes and levies collected on behalf of the state.

• Typical Rate: For older properties (“biens anciens”), these costs are approximately 7–8% of the purchase price. For new builds (“biens neufs”), the rate is lower, often around 2–3%.
• Components:
  • Departmental and communal taxes.
  • Land registration fees.
  • Disbursements for document gathering.
  • The notary’s service fee (usually around 1% of the price).
• Due Date: These are payable at completion, typically during the final transfer of funds.

These acquisition taxes and fees are unavoidable and are designed to fund government services at the local and national levels.

VAT on New Properties

When you purchase a new-build property from a commercial developer, instead of registration duties, the sale is subject to VAT (“TVA”) at the standard rate of 20% (as of 2024, subject to confirmation in 2025's budget). Registration duties are minimized for these properties, hence the overall cost structure differs substantially from older properties.

Ongoing Owners’ Taxes: Taxe Foncière and Taxe d’Habitation

Once you own a second home, two key local taxes generally apply: taxe foncière (land tax) and taxe d’habitation (residence tax).

1. Taxe Foncière: The Property Owner’s Tax

The taxe foncière is charged annually to the property owner as of January 1st each year, irrespective of how often the property is used or whether it’s rented out. This tax is intended to support local municipal government budgets, funding public services and infrastructure.

• Calculation:
  • Based on cadastral rental value (“valeur locative cadastrale”).
  • Multiplied by rates set by local authorities (commune, department, and sometimes intercommunal syndicates).
• Payment Deadline: Typically due in October each year, with paper or digital options.
• Deductions and Exemptions:
  • Significant for primary residences or age/disability, far fewer for second homes.
  • Lorem estates, charitable properties, and properties under renovation may qualify for temporary relief.

Recent reforms in 2025 are expected to update cadastral values, potentially increasing the overall bill in some regions. Municipalities have latitude to adjust rates, so property owners must check the expected local changes each year.

2. Taxe d’Habitation: The Occupant’s Tax

Taxe d’habitation has historically been charged to the occupant of a property as of January 1st—irrespective of whether they are the owner, tenant, or informal resident.

In recent years, the French government has systematically eliminated taxe d’habitation on primary residences for most households. However, for second homes, this tax remains fully in force and is a key cost consideration for non-residents and French residents alike.

• Calculation:
  • Again based on cadastral rental value.
  • Local authorities set the multiplier, which varies widely by region.
  • Additional surcharges can be imposed for vacant/under-occupied properties in certain “tight” urban markets (see later).
• Payment Date: Usually in November.
• Liable Parties: The tax is automatically due on all secondary residences, with very few exemptions.
• Surcharges in 'Zone Tendue': Many French cities (e.g., Paris, Lyon, Bordeaux, Nice) now apply a surcharge of up to 60% on top of the basic rate for second homes in areas experiencing housing shortages. Surcharges are expected to expand in 2025 due to ongoing housing pressures.

It’s imperative for property owners to budget for these ongoing annual expenses and to monitor local announcements for changes or increases in the tax regime.

The Wealth Tax on Real Estate: Impôt sur la Fortune Immobilière (IFI)

France has, since 2018, applied a specialized wealth tax known as the Impôt sur la Fortune Immobilière (IFI), replacing the previous wider Impôt de Solidarité sur la Fortune (ISF). IFI applies to owners of real estate within and outside France if the total value exceeds a set threshold, which is periodically revised in each finance bill.

• Who Pays the IFI?
  • French residents: Calculated on global real estate holdings (certain assets excluded, such as professional property).
  • Non-residents: Calculated only on their real estate holdings in France.
• Threshold: Taxable property assets exceeding €1,300,000 (as of 2024; subject to adjustment).
• Tax Bandings and Rates (2024 rates):
  • Up to €800,000 – 0%
  • €800,001 – €1,300,000 – 0.50%
  • €1,300,001 – €2,570,000 – 0.70%
  • €2,570,001 – €5,000,000 – 1.00%
  • €5,000,001 – €10,000,000 – 1.25%
  • More than €10,000,000 – 1.50%

Exemptions & Valuation

Certain assets — for example, property involved in ongoing professional activity, or some forestry/agricultural land — may be partially or fully exempt. Deductible debts at January 1st include secured mortgages (but not interest due after that date).

To value properties, owners must base figures on estimated market value as of January 1st of the relevant year, considering local comparatives and professional appraisals where possible. False or undervalued declarations risk investigation and penalty.

Declare and Pay

• The IFI declaration is annexed to your annual income tax form (form n°2042-IFI, or n°2042 if the return is digital).
• The payment deadline aligns with the income tax schedule, commonly in May or June for individuals, with extensions possible for digital declarations.

Expert advice is vital for structuring ownership to minimize IFI exposure and for ensuring compliance with evolving regulations, especially as the scope and reporting requirements will be updated in 2025.

Rental Income Tax on a Second Home

Some owners choose to monetize their second home by renting it either for long-term or short-term stays (holiday lets). Any rental income generated from a French property is subject to taxation in France, regardless of the tax residency of the owner. The tax regime differs depending on several variables:

Rental Categories and their Impact

• Unfurnished Rentals (Location Non Meublée): Taxed under the “Revenus Fonciers” category.
• Furnished Rentals (Location Meublée): Taxed as either “Bénéfices Industriels et Commerciaux” (BIC, akin to business profits), with different deductions and regimes possible.

Choosing a Tax Regime

For furnished rentals generating less than €77,700/year in gross income, the “Micro-BIC” regime applies, granting a 50% standard deduction for expenses before tax. For higher incomes, or for deliberate choice, the “Régime Réel” may apply, where actual expenses can be offset.

For unfurnished rentals, the “Micro-Foncier” regime (for gross income below €15,000/year) gives a 30% deduction; above this, the “Régime Réel” can be chosen, offsetting actual allowable expenses.

Tax Rates for Non-Residents

• Minimum Tax Rate: Non-residents are taxed at a minimum flat rate of 20% (up to €27,478 income for 2024; subject to change in 2025), or at the progressive scale if higher. Social charges (“prélèvements sociaux”) may also apply, at a reduced rate (currently 7.5% for non-EU/EEA residents after the 2019 landmark EU ruling).

Tax Filing and Payment

Rental income must be declared annually. Late or inaccurate declaration leads to penalties plus interest. Owners must also ensure they comply with registration and reporting rules for short-term lets in many cities, with stiff fines for non-compliance.

Capital Gains Tax: Selling a Second Home in France

When selling a second home in France, the profit made (the difference between the sale price and the original acquisition cost, adjusted for certain allowable expenses and improvements) is subject to capital gains tax (“plus-value immobilière”). The regime for capital gains is distinct from the treatment for primary residences, which are usually exempt.

Components of Capital Gains Tax

• Standard Rate: 19% income tax plus social contributions of 17.2%, totaling 36.2% as of 2024.
• Supplementary Tax: For large gains (beyond €50,000 per person), an additional progressive surtax (from 2–6%) is applied.

Allowable Allowances

• Ownership duration: Reductions are granted based on holding period. After 6 years, annual rebates are applied against the taxable gain, leading to full exemption after 22 years for income tax and 30 years for social charges.
• Allowable costs: Certain acquisition costs, renovation expenses, and agency commissions can be deducted with proper documentation.

Non-Residents

Non-resident EU, EEA, or Switzerland owners benefit from reduced-rate social charges (currently 7.5%). Example: a Dutch or Belgian owner may claim this relief. Post-Brexit British owners are ordinarily excluded but are encouraged to check transitional rates as per 2025’s rules.

Payment and Reporting

• Capital gains must be declared and paid at the time of sale, coordinated through the notary.
• For non-residents selling property worth over €150,000, the appointment of a French tax representative is often required to ensure compliance and correct tax calculation.

Exemptions and Reductions

• Inheritance, gifting, and divorce: Special relief may apply, subject to conditions.
• Building land and specific rural/village revitalization zones: Certain properties qualify for accelerated reductions or exemptions.

The regime for capital gains should always be checked for annual updates — especially in light of ongoing fiscal reforms in 2025.

Additional Taxes and Surcharges for Second Homes in 2025

Beyond traditional property taxes, a range of additional taxes or surcharges may be levied by local authorities or the state, particularly targeting the owners of unoccupied or under-used residences:

Vacant Housing Tax ("Taxe sur les logements vacants", TLV)

Certain urban areas apply a tax on properties that remain vacant for more than a year, specifically in regions experiencing pressure on available housing stock (“zones tendues”). The rationale: encourage better use of existing housing and discourage speculative holding.

• Rate: 12.5% of deemed rental value for the first year, rising to 25% for subsequent years.
• Exemptions: Include uninhabitable properties due to renovation, or those recently inherited/purchased.
• Expansion in 2025: More areas will fall under TLV in 2025 as the government seeks to free up housing supply.

Special Local Increases ("Majoration")

Many town councils now use their powers to hike the taxe d’habitation for second homes by up to 60%. In 2025, expect even more aggressive fine-tuning, especially in key coastal as well as tourist cities.

It is crucial for homeowners to keep abreast of municipal council announcements, as the fine print can affect second home budgets significantly each year.

Tax Declarations and Compliance: Obligations for Owners in 2025

Accurate, timely tax declaration and payment is legally mandatory for all French property owners — including foreign-based owners. The complexity of second home taxation means that robust record-keeping and professional support from agencies such as IMMO ABROAD is invaluable.

Key Declaration Deadlines (Anticipated 2025)

1. Annual Income Tax & IFI: Usually in May-June, depending on the submission method and your location.
2. Property Taxes: Taxe foncière typically billed in October, taxe d’habitation in November.
3. Rental income filings: Included on the standard annual tax declaration (Form n°2042), with annexes depending on category.
4. Capital gains: Must be declared and paid at time of sale; handled by the notary.

Documenting Ownership and Usage

• From 2023, all property owners must submit an online declaration identifying the use status of each lot owned (“Déclaration d’occupation des logements”). Fines for late or inaccurate reporting can reach €150 per property
• This online process will continue in 2025 and serves as the basis for identifying which properties are subject to taxe d’habitation and any surcharges.

Consequences of Non-Compliance

• Penalties and interest apply for late or inaccurate declarations.
• Persistent failure to pay can result in a registration of charges against the property, making future transfers difficult.
• For non-residents, failure to appoint a tax representative for capital gains can block the sale process.

The increasingly digital and procedural nature of French tax administration means that accurate records are more important than ever, especially as cross-border data sharing expands in the EU in 2025.

Deductions, Exemptions, and Planning Opportunities

While second home owners cannot hope to replicate the broad exemptions available for primary residences, a range of legitimate deductions and planning techniques can soften the fiscal bite. We explore the key areas:

1. Deductible Expenses

• For rental income: Agency fees, repairs, interest on loans, insurance, and local taxes.
• For wealth tax (IFI): Secured mortgage balances at January 1st, certain co-owned property costs, management fees, and insurance premiums (all subject to documentation and rules).
• For capital gains: Documented renovation/improvement works (not maintenance), agency commissions, and acquisition fees (optionally at a flat 7.5% of the purchase price without receipts, or at real cost if higher).

2. Special Reliefs and Allowances

• Accelerated allowances for capital gains when selling building land, or if your second home was inherited several decades ago.
• Possible partial relief for elderly or disabled owners in financial hardship, especially if local authorities adopt supportive measures.
• Succession/inheritance planning — certain civil structures (e.g., SCI, usufruct arrangements) can split ownership to optimize family wealth and reduce IFI exposure.

3. Structuring Ownership for Tax Efficiency

Experienced owners often employ the following strategies:

• Holding through a “SCI” (Société Civile Immobilière) allows flexibility in transferring shares, planning succession, and sometimes optimizing tax exposure, but brings extra complexity and annual reporting duties.
• Registered partnership (PACS) or marriage contracts may optimize succession and reduce direct inheritance tax on death.
• Careful, documented use of the property (e.g., short-term renting during periods of non-use) can offset running costs and soften the overall tax burden.

Professional Guidance

Using qualified tax advisors or property agents with expertise in French cross-border tax (such as IMMO ABROAD) can make a substantial difference to your net fiscal position, ensuring compliance and efficient use of deductions/exemptions.

Tax Developments Affecting Second Homes in 2025

The landscape for property taxes in France is subject to regular review. For 2025, several policy and legislative changes are in prospect, including:

1. Expansion of “Zones Tendues”: More communes are designated as housing pressure areas, widening the base for TLV (vacant dwelling tax) and for tax d’habitation surcharges on second homes.
2. Revaluation of Cadastral Values: Update to property base values for tax, increasing tax bills in some areas (notably major cities and tourist towns).
3. Further Limitation of Tax Reliefs: The government may tighten criteria for certain deductions and exemptions as it seeks to increase fiscal receipts.
4. Cross-Border Information Sharing: Enhanced reporting obligations for non-residents with global tax authorities due to ongoing international cooperation initiatives.
5. Clarification for Non-EU Owners: Changes to social charge rates for UK owners post-Brexit and possible new administrative hurdles.

We recommend reviewing the annual Finance Act (“Loi de Finances”) and municipal decrees each December for the latest confirmed changes for the forthcoming year.

Practical Scenarios: Calculating Your French Tax Liabilities

To clarify how these taxes play out for different profiles, let’s examine two practical case studies as of 2025:

Case Study 1: Non-Resident Dutch Owner with a Holiday Villa in Nice

• Purchase Price: €800,000 (acquired in 2020)
• Annual Expenses:
  • Notary & registration (one-off): ~€60,000
  • Taxe foncière: ~€3,200/year
  • Taxe d’habitation (with 60% majoration): ~€2,600/year x 1.6 = €4,160
  • Vacant property surcharge (TLV), if unoccupied for more than 1 year: possible additional €1,500.
• Wealth Tax (IFI): Depends on aggregate French property holdings—likely exempt if below €1.3m threshold.
• Rental Income: If short-term letting, declare gross receipts, deduct expenses, and pay 20% tax plus 7.5% social charge on net.
• Capital Gain on Sale (after 10 years): Partial reduction on taxable gain; 19% capital gains tax and 17.2% social contributions.

Case Study 2: French Resident Couple with a Rural Second Home

• Purchase Price: €200,000 (2005)
• Taxe foncière: ~€800/year
• Taxe d’habitation: ~€650/year (may be lower in a non-“zone tendue” area)
• IFI: Total real estate value below €1.3m; not liable.
• Rental Income: Property let occasionally in summer – taxed at applicable rates.
• Capital Gains: Sale in 2025 qualifies for full exemption after 22 years for income tax and after 30 years for social charges.

Each scenario demonstrates that tax impacts are highly individualized and depend on local rates, holding period, property status, and how you use your second home.

Essential Tips for French Second Home Owners

Based on years of experience, IMMO ABROAD experts suggest these ten essential actions to optimize your tax and ownership experience in France:

1. Understand Property Status: Accurately declare your property status annually and update if your usage changes.
2. Stay Current: Monitor for updates to both national and local tax rules each year.
3. Organize Documentation: Keep meticulous records—purchase contracts, renovation receipts, tenancy agreements, and tax payments.
4. Explore Ownership Structures: Consider using an SCI, usufruct, or co-ownership options for asset protection and tax planning.
5. Budget for Surcharges: Anticipate surcharges for taxe d’habitation and vacant property taxes in key urban centers.
6. Consider Rental Opportunities: Renting out your property (long-term or short-term) can offset ongoing costs—just be sure to declare income and meet local regulations.
7. Plan for Capital Gains: Before selling, review possible deductions, holding period allowances, and if you need a French tax representative.
8. Prepare for IFI: Annually value your French and, if a resident, worldwide real estate assets to assess IFI liability.
9. Meet Deadlines: Submit all required tax declarations on time to avoid fines and penalties.
10. Seek Specialized Advice: Engage with multi-lingual professionals like those at IMMO ABROAD for clarity and compliance from purchase through to resale.

Frequently Asked Questions (FAQs) on Taxes for Second Homes in France

Can I avoid the taxe d’habitation on my second home?

No, for 2025, the elimination of taxe d’habitation only applies to main residences. Second homes remain fully liable, and the tax can be significantly increased in zones under housing pressure.

Are there any exemptions for elderly owners?

Some communes offer partial exemption from taxe foncière based on low income and age/disability. For second homes, such reliefs are rare, but you should check with your local “centre des impôts”.

How does Brexit affect British second home owners?

Post-Brexit, British owners are regarded as non-residents from outside the EEA for the purposes of social charges and some declarations. As of 2024, they pay the standard 17.2% social levy on capital gains; this could be reviewed in 2025.

Do I need a French bank account for my property taxes?

While not strictly mandatory for non-residents, having a French account simplifies annual payments and helps avoid missed deadlines due to bank and currency delays.

How do I contest or appeal my property tax bill?

If you believe your bill is incorrect, you may file an online query (réclamation) with the local tax office. Be sure to submit supporting documents, such as proof of occupancy, changes in value, or error in classification, promptly.

Can I rent out my property on Airbnb or similar platforms?

Most cities now require owners to register before short-term renting (especially in “zone tendue” cities), with fines for non-compliance exceeding €5,000. All income must be declared and appropriate taxes paid.

What is the impact if my property is unoccupied?

If your second home stands empty, it may be subject to the vacant home tax (TLV) and can also lead to local surcharges. Proactive rental or documented use can prevent unnecessary surcharges.

What happens if I inherit a second home?

Inheritance brings its own tax regime, but standard local property taxes continue uninterrupted. The basis for future capital gains is generally the value at the date of inheritance.

Do I need to appoint a tax representative?

Non-EU/EEA residents selling a second home worth over €150,000 must usually appoint a “représentant fiscal” to manage capital gains compliance.

Are there tax incentives for environmentally friendly renovations?

For primary residences, grants and credits are more substantial. For second homes, opportunities (e.g., reduced VAT, local grants) are fewer, but evolving environmental policy may open new incentives by 2025.

Working with IMMO ABROAD for Seamless Ownership

At IMMO ABROAD, we believe that informed planning is the key to enjoying the best of French homeownership — and to ensuring you stay fully compliant with evolving tax law. Our multilingual consultants offer:

• Personalized tax and property planning for French and international clients.
• Reliable annual declaration and property management services.
• Practical advice on structuring, renting, and selling your second home.
• Fast resolution of ongoing tax or administrative challenges.
• Comprehensive market analysis to help you anticipate ownership costs, returns, and strategic opportunities for the years ahead.

Conclusion: Mastering French Second Home Taxes in 2025 and Beyond

The joys of owning a second home in France come with significant fiscal responsibilities. In 2025, regulatory tightening, cadastre revaluation, and increased surcharges mean that careful planning is more important than ever for new and existing owners alike. By understanding each tax and fee in depth, following best practices in documentation, and working with experts such as IMMO ABROAD, you can preserve — and even enhance — the value and enjoyment of your French paradise, all while meeting your legal obligations with confidence.

As France’s property taxation landscape continues to evolve, up-to-date guidance, diligent compliance, and clever planning are not just optional — they are indispensable. Whether you're about to fall in love with your first French retreat, or are reviewing your home’s position for long-term sustainability, let your journey be guided by expertise, local insight, and scrupulous attention to fiscal detail.

Reach out to our team for bespoke guidance and enjoy your French second home ownership to the fullest in 2025 and for years to come.

Appendix: Glossary of French Property Tax Terms

• Taxe foncière: Annual property tax due by the owner.
• Taxe d’habitation: Annual residence tax; now largely abolished for main homes but fully payable for second homes.
• IFI (Impôt sur la Fortune Immobilière): Wealth tax on high-value real estate holdings.
• Plus-value immobilière: Capital gains realized on property sales.
• Zones tendues: Areas designated as suffering from housing shortages; subject to special taxation.
• Surcharge / Majoration: Supplemental tax or penalty, particularly on taxe d’habitation.
• SCI (Société Civile Immobilière): Civil property company, a common ownership structure.
• Notaire: Public official handling legal formalities in property transfer.
• Déclaration d’occupation: New declaration of property status and occupancy, required online for every dwelling.
• Prélèvements sociaux: French social surtaxes, levied on investment/rental income and capital gains.

Further Support from IMMO ABROAD

Your peace of mind is our priority. IMMO ABROAD is ready to assist at every stage — from acquisition, through annual administration, to resale or inheritance, ensuring tax compliance and optimal financial outcomes for your French second home in 2025 and beyond.