Short answer. A buyer who lives outside France and acquires a prime apartment in Paris first pays transfer duties of 6.3185 per cent of the price, Paris applying the departmental rate of 5 per cent. Every year after that, the buyer bears property tax, a residence tax on second homes carrying a 60 per cent surcharge and, above €1.3 million of net assets, the real estate wealth tax (IFI), whose scale rises to 1.5 per cent. On resale, the gain is taxed at 19 per cent, plus 17.2 per cent of social charges (7.5 per cent for a person covered by a European or Swiss social security scheme). The choice of holding structure has become the riskiest point: since 2026, a company subject to corporate income tax that houses its shareholder may owe an annual tax of 20 per cent of the value of the dwelling, and the 3 per cent tax can now be avoided only by an annual return.
1. Tax residence, not nationality, and two thresholds that change the arithmetic
French tax law does not know the “foreign buyer”. It knows the taxpayer who has no tax domicile in France within the meaning of Article 4 B of the General Tax Code (code général des impôts, CGI), whatever their nationality, and it taxes that person on what lies on French soil: here, the property, the rent it yields, the gain it produces and its transfer on death or by gift. Tax treaties almost never take that right away from France. What they mostly organise is the relief of double taxation in the State of residence, which is why the calculation is finished with the adviser in the home country.
What separates a prime acquisition from an ordinary purchase comes down to two thresholds. The first, €1.3 million of net real estate assets, triggers the wealth tax. The second, €5 million, is the point at which the law becomes suspicious: this is the level at which the deduction of loans is capped for wealth tax purposes and at which, since the Finance Act for 2026, a company subject to corporate income tax falls within the scope of a 20 per cent tax on the dwellings it reserves for its shareholder. A family apartment in the 7th, 8th or 16th arrondissement clears the first without effort. Many clear the second.
To make this concrete, let us follow one buyer. A German national living in London, she buys in the autumn of 2026 an apartment worth €6 million near Les Invalides, which she intends to occupy a few weeks a year.
2. At completion: 6.3185 per cent in duties, no longer 5.81
The rate that matters in Paris is no longer the one the online calculators repeat. The departmental duty, set at 3.80 per cent by Article 1594 D of the CGI and which departments could raise to 4.50 per cent, may be increased to 5 per cent for deeds signed between 1 April 2025 and 31 March 2028 (Law No. 2025-127 of 14 February 2025, Article 116; BOFiP, BOI-ENR-DMTOI-10-20), and Paris is among the departments applying that maximum, according to the table of rates published by the French tax administration as at 1 June 2026. To this are added the municipal tax of 1.20 per cent (Article 1584) and the State’s levy for assessment costs, equal to 2.37 per cent of the departmental duty (Article 1647, V). Total: 6.3185 per cent of the price. The exception for first-time buyers acquiring their main residence does not apply to a pied-à-terre.
On €6 million, our buyer therefore pays €379,110 in duties, plus €6,000 of land registration contribution, levied at 0.10 per cent (Article 881 K), then the notary’s regulated fees and disbursements. A new-build or off-plan dwelling follows a different logic: the price bears VAT and the land registration tax falls to about 0.715 per cent. The case is rare in the sought-after arrondissements.
One point is settled before the offer, not at the notary’s office. The estate agent’s commission changes the taxable base depending on whether the mandate puts it on the seller or on the buyer, and at this price level the difference runs to thousands of euros.
3. Every year: property tax, a surcharged residence tax, and vacancy soon taxed at 60 per cent
The owner pays property tax (taxe foncière), whose Paris rate has been 20.5 per cent since the 2023 vote, applied to a cadastral rental value which, in old buildings, remains far below market rent. The occupier of a furnished dwelling that is not their main residence also owes the residence tax on second homes, which the City voted at 20.32 per cent for 2023 and to which it applies the maximum 60 per cent surcharge allowed by Article 1407 ter of the CGI. Relief from that surcharge is confined to narrow cases, among them the person whose work obliges them to live in Paris, away from their main home.
That leaves the dwelling nobody occupies. From the 2027 tax year, the vacant homes tax and the residence tax on vacant dwellings disappear in favour of a single tax on the vacancy of residential premises, created by Article 108 of the Finance Act for 2026 and codified in Article 1406 bis. In municipalities where the market is under strain, it applies to a dwelling that has been vacant for at least one year on 1 January, at 17 per cent of the rental value in the first year and 34 per cent thereafter, rates which the municipality may raise to 30 and then 60 per cent. The Paris Council voted those maximum rates in July 2026. Vacancy before 1 January 2027 will be counted, and the tax spares in particular the dwelling occupied for more than ninety consecutive days and the one whose vacancy is beyond the owner’s control. The apartment bought to be left empty, pending works nobody orders, has become the worst of all choices.
4. The real estate wealth tax: up to 1.5 per cent a year
A non-resident is liable to the wealth tax only on French real estate and on shares in companies, French or foreign, up to the fraction of their value that represents such real estate, once the total exceeds €1.3 million on 1 January (CGI, Article 964, 2°). The scale starts at €800,000: 0.5 per cent up to €1.3 million, 0.7 per cent up to €2.57 million, 1 per cent up to €5 million, 1.25 per cent up to €10 million, 1.5 per cent beyond. For a €6 million apartment held without debt, the tax is €48,190 a year. A pied-à-terre does not qualify for the 30 per cent allowance, which is reserved for the main residence.
Borrowing reduces the base, but less than people think. An interest-only loan repayable at maturity is deductible only for an amount that falls each year as if it were amortising, a loan granted by a relative is in principle not deductible, and where the taxable estate exceeds €5 million, the fraction of the debts above 60 per cent of its value is allowed only as to one half, unless it is shown that the loan was not taken out for a mainly tax purpose (Article 974). If our buyer finances €4 million with a ten-year interest-only loan, the debt taken into account on the first 1 January is not €4 million but €3.8 million. It then shrinks by €400,000 a year.
Holding through a company changes nothing. The shares are taxable for the value of the real estate they represent, and advances made by the shareholder to the company to fund the purchase are not deducted in valuing them, in proportion to the shareholding, unless, here again, a purpose that was not mainly tax-driven is proved (Article 973, II; BOFiP, BOI-PAT-IFI-20-30-30). The company funded by a shareholder loan, long sold as a remedy against wealth tax, no longer produces that effect. One rule works the other way for those who end up settling: a person who establishes their domicile in France after five calendar years abroad is taxed only on French assets until 31 December of the fifth year following arrival (Article 964, 1°).
5. The company: two taxes now punish the wrong structure
The year 2026 changed the picture, twice.
First, the 3 per cent tax. Any legal entity, French or foreign, that owns real estate in France, directly or through a chain of holdings, owes each year 3 per cent of its market value (Article 990 D), that is €180,000 for our apartment. Entities with their seat in France, in the European Union or in a State bound to France by an administrative assistance treaty escape it by disclosing their shareholders. Until the spring of 2026, it was enough to undertake to provide that information to the tax authorities if they asked for it. Law No. 2026-534 of 25 June 2026 on the fight against social security and tax fraud removed that route (Article 102): since 27 June 2026, the exemption requires an annual return, filed by 15 May at the latest, stating the composition and value of the real estate and the identity and address of the shareholders holding more than 1 per cent of the rights (Article 990 E, 3°, d and e; Article 990 F). Forgetting costs 3 per cent. A company established in a State without such a treaty does not have that route at all.
Next, the 20 per cent tax. Article 235 ter C of the CGI, introduced by Article 7 of Law No. 2026-103 of 19 February 2026 (Finance Act for 2026), creates a tax on the non-business assets of companies subject to corporate income tax where three conditions are met at the close of the financial year: the market value of all their assets reaches €5 million; an individual, whose rights are added to those of their spouse or partner, their ascendants, descendants and brothers and sisters, holds at least half of them or in fact exercises the power of decision; and passive income, rents included, makes up more than half of their operating and financial income. Among the taxed assets, alongside yachts, aircraft, jewellery and wine, are dwellings whose enjoyment that individual reserves for themselves, whether occupied free of charge or for a rent below the market price, as a main residence or not. The base is the market value of the dwelling, reduced only by the loan used to buy it, in principle without regard to the shareholder’s advances. The rate is 20 per cent, every year, and the tax is not deductible from taxable profit. It applies to financial years closed on or after 31 December 2026. Holding through a trust raises a presumption that the control condition is met.
Who pays it? Where the company has its seat in France, the company does, and the text, as it reads, draws no distinction according to whether its shareholder lives in Paris or in London; where its seat is abroad, the tax is owed only by a shareholder domiciled in France. The consequence is counter-intuitive. Our London buyer is not caught if she holds the apartment through a Luxembourg or British company, in which case she is back with the 3 per cent tax and its returns; she may be caught if she followed the advice, still common, to place the property in a French simplified joint-stock company (SAS) or in a French property company (SCI) that has opted for corporate income tax. On €6 million with no loan, the tax would be €1.2 million a year.
What is not known must be said. At the date of this article, the tax authorities have published no guidance on Article 235 ter C and no court has applied it: we are reasoning on the text alone. Three questions remain open for the non-resident. The first is the one just described, the application of the tax to a French company whose shareholder has no domicile in France. The second concerns the passive income condition: a company that receives strictly nothing does not literally meet it, whereas one that collects a token rent from its shareholder meets it at once, which is the opposite of what those who charge a rent in order to be compliant are trying to achieve. The third concerns tax treaties, none of which was negotiated with this tax in mind. In case of doubt, the firm’s position is clear: a property of this value intended for personal use should no longer be acquired through a company subject to corporate income tax, and existing ones should be reviewed before the financial year closing on 31 December 2026.
The tax-transparent French property company (SCI), which is not subject to corporate income tax, remains outside the scope of this tax. It removes neither the wealth tax nor inheritance tax, but it organises co-ownership and succession; its treatment by the tax authorities of the country of residence, sometimes harsh, is to be checked before it is formed.
6. If the property is let
Rent from a French property is taxable in France. The non-resident bears income tax at a rate that cannot be lower than 20 per cent up to the upper limit of the second band of the scale, that is €29,579 for 2025 income, and 30 per cent above it, unless they show that the average rate computed on their worldwide income would be lower (Article 197 A). Social charges are added at 17.2 per cent, property income having been kept out of the increase in the general social contribution voted for 2026 (Law No. 2025-1403 of 30 December 2025, Article 12); a person covered by a compulsory social security scheme of another State of the European Economic Area or of Switzerland owes only the 7.5 per cent solidarity levy. Furnished lettings fall under business profits, not property income. Letting to a third party at market price has another effect: the dwelling is no longer reserved for the shareholder within the meaning of Article 235 ter C.
7. On resale: 19 per cent, social charges, and a tax representative
The gain of a non-resident individual is subject to a 19 per cent levy (Article 244 bis A), to social charges of 17.2 per cent, reduced to 7.5 per cent for a person covered by a European or Swiss scheme, and, where the taxable gain exceeds €50,000, to an additional tax of 2 to 6 per cent (Article 1609 nonies G). The total reaches 42.2 per cent in the least favourable case. Time erodes it: through the allowances for length of ownership, income tax disappears after twenty-two years and social charges after thirty (Article 150 VC). A company subject to corporate income tax pays at the rate of that tax, and if its seat is outside the European Union and the European Economic Area, the purchase price of the building is reduced by 2 per cent per year of ownership in computing the gain, which swells the taxable gain as time passes.
A seller who lives outside the European Union, Iceland and Norway must also appoint an accredited tax representative, who is answerable for payment of the tax (Article 244 bis A, IV). The automatic exemption applies only if the price does not exceed €150,000 or if the property has been held long enough to be fully exempt (BOFiP, BOI-RFPI-PVINR-30-20). For a prime property, it never applies. Neither the notary nor the avocat may act in that role. Our buyer, a UK resident, will therefore have to engage one on the day she sells, and the cost is negotiated before the preliminary contract.
8. Passing it on: 45 per cent in the direct line, company or not
Where the deceased or the donor is not domiciled in France, French gift and inheritance tax applies to real estate located in France, whether held directly or indirectly (Article 750 ter, 2°). The text has closed the exits one by one, and its mechanism deserves to be followed in a single sweep: real estate is deemed to be held indirectly where it belongs to a company in which the deceased holds more than half of the rights, alone or with their spouse, their ascendants, descendants or brothers and sisters, directly or through a chain of holdings and whatever the number of interposed companies, while shares in an unlisted company whose seat is outside France, but whose assets consist mainly of French real estate, are treated as French assets in proportion to the value of that real estate in its total assets, so that neither the French property company, nor the foreign holding company, nor the two stacked together take the Paris apartment out of the reach of French tax.
The scale is the same for everyone. After an allowance of €100,000 per child, duties in the direct line reach 40 per cent above €902,838 and 45 per cent above €1,805,677; they are 60 per cent between unrelated persons, and the surviving spouse is exempt. On a €6 million apartment passing to two children, with no other French asset, the bill exceeds €2.1 million. An inheritance tax treaty, where one exists with the State of residence, may shift or credit that charge. It almost never removes it for real estate.
Succession is therefore prepared at the time of purchase. The choice between full ownership and a split between usufruct and bare ownership, the allocation between spouses, the law applicable to the succession and the place of the children in the structure are decided before the preliminary contract, because correcting them afterwards costs fresh duties.
9. What the firm does, and how fast
The firm steps in before the purchase offer. It reviews the proposed structure against the 3 per cent and 20 per cent taxes, quantifies the wealth tax and the cost of exit, coordinates the notary and the tax adviser in the country of residence, then follows the preliminary contract through to completion. It also takes over existing structures, French companies subject to corporate income tax and foreign companies so far exempt on a mere undertaking, before the financial year closing on 31 December 2026 and the filing deadline of 15 May 2027. Reply within one business day: tell us about your situation.
On the same subject: buying property in France as a non-resident and our page buying property in France as a foreign buyer.
Frequently asked questions
What are the transfer duties on an existing apartment in Paris in 2026?
6.3185 per cent of the price: 5 per cent departmental duty, 1.20 per cent municipal tax and 2.37 per cent of the departmental duty for assessment costs. The 0.10 per cent land registration contribution and the notary’s fees come on top.
Does a non-resident pay French wealth tax on a Paris apartment?
Yes, as soon as their French real estate, held directly or through companies, is worth more than €1.3 million net on 1 January. The scale runs from 0.5 to 1.5 per cent; for €6 million with no debt, the tax is €48,190 a year.
Should a prime property be bought through a company?
Not through a company subject to corporate income tax where the property is for personal use and the assets reach €5 million: Article 235 ter C of the General Tax Code exposes it to an annual tax of 20 per cent. Direct ownership and the tax-transparent property company (SCI) remain the two routes to compare, before the preliminary contract.
What is the risk for an apartment left empty in Paris?
From 2027, the tax on the vacancy of residential premises: 30 per cent of the rental value in the first year of taxation, 60 per cent thereafter, under the rates voted by the Paris Council in July 2026.
How is a non-resident’s capital gain taxed on resale?
19 per cent, plus 17.2 per cent of social charges (7.5 per cent for a person covered by a European or Swiss scheme) and a tax of 2 to 6 per cent above €50,000 of gain. A resident outside the European Union, Iceland and Norway must appoint an accredited tax representative.
Article written by Hervé Guyader, avocat at the Paris Bar, doctor of law. This content is general information and does not replace legal advice.
French version: Immobilier de prestige à Paris : la fiscalité de l’acheteur étranger.