France’s New Vacant Homes Tax (TVLH) from 2027: A Practical Guide for Foreign Property Owners
From 1 January 2027, France will replace its two existing taxes on empty dwellings — the taxe sur les logements vacants (TLV, annual tax on vacant homes) and the taxe d’habitation sur les logements vacants (THLV, local occupancy tax on vacant homes) — with a single new levy: the taxe sur la vacance des locaux d’habitation (TVLH, tax on the vacancy of residential premises). The reform was enacted by article 108 of the French Finance Act for 2026, Law n° 2026-103 of 19 February 2026, and it matters directly to non-resident owners: a dwelling left empty in a housing-pressure area may now be taxed automatically, without any prior decision by the local council, at rates of up to 60 per cent of its cadastral rental value.
British, American and Australian buyers are particularly exposed because they frequently keep a French property as a second home used only a few weeks a year — precisely the profile the legislature had in mind when it merged the two vacant-home taxes. The French property press has covered the reform extensively this summer, and the practical questions are identical wherever the owner lives: Is my furnished second home a “vacant home” in the eyes of the tax administration? What evidence should I keep? What happens if I let the property to short-term holiday guests, or if I simply leave it empty while trying to sell it?
This article answers those questions on the basis of the statutory texts and of the recent case law of the Cour de cassation — all cited below with their official links. It sets out the mechanics of the new tax, the exemptions written into the law, the civil-law framework around vacancy and seasonal letting, and the practical steps a non-resident owner should take before the end of 2026.
I. One Tax Replacing Two: The Mechanics of the 2027 Reform
A. From the TLV and the THLV to the TVLH
Until the end of 2026, two distinct taxes may apply to an empty home, depending on where it is located. The taxe sur les logements vacants (TLV), governed by article 232 of the French Code général des impôts (CGI, General Tax Code), applies in communes classified as zones tendues — areas under serious housing pressure — for any dwelling vacant for at least one year on 1 January of the tax year. Its rate is 17 per cent of the cadastral rental value for the first year of taxation and 34 per cent from the second year onwards, and its yield is allocated to the national housing agency (Anah). The taxe d’habitation sur les logements vacants (THLV), set out in former article 1407 bis of the CGI, is a purely optional levy: communes outside pressure areas may decide, by council vote, to tax homes that have been vacant for more than two years, at rates aligned with the taxe d’habitation (occupancy tax) on second homes.
Article 108 of Law n° 2026-103 abolishes this dual system. It repeals article 232 of the CGI and article 1407 bis of the CGI, and it creates a new Section II bis of the tax code headed “Taxe sur la vacance des locaux d’habitation”, containing the new article 1406 bis. The law specifies that the new provisions apply “aux impositions établies au titre de l’année 2027” — to the taxes assessed for the year 2027 — and that, for the 2027 assessment, “il est tenu compte de la durée de vacance de chaque logement avant le 1er janvier 2027”, meaning that the period of vacancy accumulated before 1 January 2027 counts towards the one- or two-year threshold. In practice, a foreign owner whose second home has stood empty since early 2026 may already find the new tax triggered in 2027, even though the tax itself only exists as of that year.
The merger was initiated in the Senate, which considered the two-tax system too complex, and the reform deliberately widens the net in two ways. First, it makes taxation automatic in pressure areas: no council vote is needed for the TVLH to apply to a dwelling vacant for one year in a commune with a marked imbalance between supply and demand. Second, it transfers the revenue to the communes themselves — the Anah no longer receives the proceeds — which gives every commune outside pressure areas a direct financial incentive to vote the optional tax in. Foreign owners therefore cannot assume that only Paris, Nice or Bordeaux are concerned: any commune in France may decide to tax vacant homes from 2027.
B. When a Home Counts as Vacant, and How the Tax Is Calculated
Article 1406 bis of the CGI defines the scope of the new tax with precision. It is due “pour les logements vacants au 1er janvier de l’année d’imposition depuis au moins” — for dwellings vacant on 1 January of the tax year for at least — one year, when the dwelling is situated in a commune showing “un déséquilibre marqué entre l’offre et la demande de logements” (a marked imbalance between the supply of and demand for housing), or two years when it is situated elsewhere. The notion of marked imbalance is itself defined by the text: a commune belonging to a continuous urban zone of more than 50,000 inhabitants in which high rents, high prices for older homes or a high number of housing applications relative to annual lettings in the social rental stock are observed; or, failing that, a commune with a high proportion of dwellings other than principal residences. A decree establishes the list of the affected communes.
The basis of the tax is the valeur locative cadastrale (cadastral rental value) of the dwelling, as provided by article 1409 of the CGI — the same theoretical rental figure used to calculate the taxe foncière (property tax). The rates, in pressure areas, are 17 per cent for the first year of taxation and 34 per cent from the second year; the commune may vote to raise these rates to 30 per cent and 60 per cent respectively. Outside pressure areas, the commune may institute the tax and fix its own rate, provided it does not exceed 50 per cent. In both cases the tax is due by the owner, the usufructuary, the holder of a construction or rehabilitation lease, or the emphytéote (long-lease holder) who has had the dwelling at their disposal since the beginning of the vacancy period. A non-resident who owns outright, therefore, is personally liable — there is no corporate veil and no representative mechanism that shifts the charge onto a tenant or a managing agent.
Four exclusions are written into the law. First, dwellings occupied for more than ninety consecutive days during the reference period: a home genuinely lived in for three months is not “vacant”, however empty it is for the rest of the year. Second, dwellings whose vacancy is “indépendante de la volonté du contribuable” — beyond the owner’s control. The administration excludes in particular a property offered for sale or rent at market conditions which has simply failed to find a buyer or a tenant, as well as a property whose vacancy results from substantial renovation work. Third, dwellings forming part of the public domain. Fourth, dwellings held by social landlords (HLM bodies and comparable entities listed in articles L. 411-2 and L. 481-1 of the Code de la construction et de l’habitation, the Construction and Housing Code). The mechanism of the tax — collection, control, disputes, guarantees and penalties — follows the rules applicable to built-property taxe foncière, and abatements are borne by the commune.
Finally, it is important to understand what the reform does not change: the second-home surcharge. Outside the vacant-home tax, communes in pressure areas may also vote a surcharge of 5 to 60 per cent on the taxe d’habitation due on furnished second homes, under article 1407 ter of the CGI (a provision restructured by the same 2026 Finance Act, with reliefs for people forced to live apart from their main home for professional or health reasons). A furnished second home in a coastal commune may therefore attract the occupancy tax plus the surcharge, while an empty home in the same commune attracts the TVLH. These are two different taxes, with two different triggers — furnishing and use on the one hand, genuine vacancy on the other.
II. Practical Consequences for Foreign Owners
A. Second Homes Are Not Vacant Homes: The Evidence to Keep
The single most important distinction for non-resident owners is between a vacant home and a second home. A furnished second home — used, even occasionally, for holidays, weekends or short stays — is not a vacant home for tax purposes. The UNPI, the French national union of property owners, stressed this summer that “a second home, meaning a furnished property, is not a vacant home”, and that a property furnished on 1 January and therefore subject to the taxe d’habitation on second homes will not be subject to the TVLH even if the owner occupies it only a few days a year. The two taxes are mutually exclusive by construction: the taxe d’habitation sur les résidences secondaires, due under article 1407 of the CGI for all furnished dwellings occupied otherwise than as a principal residence, presupposes a furnished, habitable home; the TVLH presupposes an empty one.
Because the administration will rely on objective clues, an owner should assemble a file proving that the home is genuinely furnished and used: electricity bills showing consumption during the year, furniture purchase invoices, insurance policies covering contents, water or internet bills in the owner’s name, and records of stays (travel tickets, rental car bookings). The ninety-consecutive-day rule in article 1406 bis gives a clear benchmark: if the dwelling is occupied for more than ninety consecutive days within the reference year, it is excluded from the tax regardless of what happens during the remaining months. For an owner who spends every summer in France, keeping the evidence of that occupation is a simple and decisive protection — as decisive as keeping the annual electricity bills for the flat in Cannes or the ski chalet in Megève.
The civil courts apply the same logic of substance over form. Under article L. 631-7 of the Code de la construction et de l’habitation, as recently rewritten, the residential use of a local is assessed by reference to its actual use on the reference dates (1 January 1970 to 31 December 1976, or at any time in the thirty years preceding the request), and the text now states expressly that “L’usage d’habitation s’entend de tout local habité ou ayant vocation à l’être même s’il n’est pas occupé effectivement, notamment en cas de vacance” — a local counts as residential even if it is not actually occupied, in particular when it is vacant. The Cour de cassation has applied this principle strictly. In Cass. 3e civ., 13 June 2024, no. 23-11.053, it held that “un local affecté à un usage d’habitation au 1er janvier 1970 ne perd pas cet usage lorsqu’il est ultérieurement réuni avec un autre local” — a local used as housing at the 1970 reference date does not lose that status when it is later merged with another unit, whatever the use of the latter. In Cass. 3e civ., 16 October 2025, no. 24-13.058, it added that the 1970 residential use is established by the effective use of the premises at that date, “peu important l’irrespect éventuel de normes de décence et d’habitabilité alors en vigueur” — regardless of any failure to meet the decency and habitability standards then in force. The practical message for the tax issue is the same as for the change-of-use issue: a property whose status is residential remains residential even when empty, which is precisely why the vacant-home tax exists — and why keeping a furnished, usable second home is the cleanest way to remain outside its scope.
Non-resident owners should also note that the rules apply to them without any territorial concession. In 24-13.058, the second defendant was a company incorporated under foreign law with a seat in the United Kingdom, pursued jointly with the French owner of the apartment; the Cour de cassation quashed the appeal ruling that had rejected the commune’s claims. There is no exemption for non-residents, and no principle of French law according to which a home kept for occasional holiday use escapes the rules applicable to residential premises. The only question is factual: is the home furnished and used, or is it empty?
B. Renting Out, Change of Use, and the Risks of a Vacant Investment
Many foreign owners who do not want their home empty choose short-term holiday letting. This is a legitimate way to keep a property occupied — guests who stay long enough take the home out of the TVLH scope entirely — but it engages a separate regime: the change of use of residential premises. Under article L. 631-7 of the Code de la construction et de l’habitation, in the communes listed by decree, the change of use of residential locals may be subject to prior authorisation, and the law provides that “Le fait de louer un local meublé à usage d’habitation en tant que meublé de tourisme, au sens du I de l’article L. 324-1-1 du code du tourisme, constitue un changement d’usage” — letting a furnished residential local as a tourist furnished rental constitutes a change of use within the meaning of the article. The old wording, applied by the Cour de cassation before the 2024 and 2026 reforms, was the same in substance: repeatedly letting a furnished dwelling for short periods to a transient clientele that does not take up residence there constitutes a change of use requiring prior authorisation.
The case law applies this rule to owners, tenants and sub-lessees alike. In Cass. 3e civ., 15 February 2023, no. 22-10.187 (published in the Bulletin), the Court confirmed that a tenant who sub-lets a furnished dwelling in breach of article L. 631-7 is personally liable for the civil fine provided by article L. 651-2 of the same code, even if the landlord had guaranteed the legality of short-term letting in the lease: the sub-lessee “ne pouvait ignorer la réglementation applicable” — could not ignore the applicable regulations — and the contractual guarantee did not exonerate him. In Cass. 3e civ., 11 July 2024, no. 22-24.020 (published in the Bulletin), the Court specified how the fine is calculated: its amount is defined “par personne poursuivie et par local irrégulièrement transformé” — per person pursued and per illegally converted local — and, because the fine is a penalty within the meaning of the European Convention on Human Rights, the principles of personality and individualisation of penalties prohibit any joint and several conviction. Owners who let through platforms without authorisation therefore expose themselves personally, in proportion to the number of illegally converted units, to fines which the current text of article L. 651-2 caps at 100,000 euros per local, with the courts empowered to order a return to residential use under an astreinte (penalty payment) of up to 1,000 euros per day per square metre.
The lesson for foreign owners is threefold. First, before listing an apartment in Paris, Lyon or any commune covered by the authorisation regime, verify whether the change of use has been authorised; a foreign owner who acquired the flat as a second home cannot assume that the authorisation automatically attaches to the property. Second, keep the authorisation, the tenancy records and the guest register together with the occupancy file, so that both the tourist-rental obligations and the vacant-home tax file are consistent. Third, remember that short-term letting is not the only way to keep a home occupied: an ordinary residential lease — a bail d’habitation — removes the property from the vacancy analysis completely, and the Cour de cassation has confirmed, in Cass. 3e civ., 13 March 2025, no. 23-21.681, that even a lease concluded “à titre de résidence secondaire” (for use as a second home) is a full residential lease, with all its consequences for security deposits, dilapidation and charges. The distinction between a tenant and a guest, and between a dwelling and a vacant local, is a legal classification, not a matter of how often the owner visits.
Keeping a property permanently vacant, meanwhile, is not only a tax exposure — it is an economic risk that the courts take seriously. In Cass. 3e civ., 16 October 2025, no. 24-11.424, the Court held that “constitue un préjudice de jouissance l’impossibilité de relouer un logement destiné à la location en raison de désordres résultant du manquement contractuel du locataire” — the impossibility of re-letting a dwelling intended for rental, caused by the tenant’s failure to restore the premises, is an actionable loss of enjoyment under article 1732 of the Code civil (the tenant answers for damage occurring during his occupation). The same reasoning applies, symmetrically, on the tax side: a dwelling left empty because the previous tenant left it in a state requiring months of work is, in principle, vacant for reasons beyond the owner’s control — provided the work is real, substantial and documented. Expert reports, renovation quotations and the works invoices constitute the file to produce if the administration questions the vacancy, exactly as the UNPI advises for properties awaiting works.
Foreign owners should also anticipate the longer-term consequences of prolonged vacancy. The case of Cass. 3e civ., 9 April 2026, no. 24-12.996 shows how far the consequences can run: buyers of a tax-advantaged rental investment were notified of an adjustment because their flat had remained vacant — the property “est ensuite demeuré vacant” (then remained vacant) for more than twelve months — and the Cour de cassation accepted that the risk of the fiscal adjustment was the moment at which their loss materialised, compensating the tax bill, the financing costs and the reduced re-letting rent at 80 per cent of the sums expended. The lesson is symmetrical for the new TVLH: a non-resident who lets a French property stand empty for more than a year may face both the tax itself and the collapse of the income assumptions on which the acquisition was based. And the classification of the occupancy cannot be improvised after the fact: in Cass. 3e civ., 25 May 2023, no. 22-11.745, successive seasonal contracts were requalified, by a final judgment, as a single one-year furnished dwelling lease — with the consequence that the taxe d’habitation was due by the occupant as principal residence. Owners cannot rely on labels alone: the substance of the occupation governs both the tenancy law and the local taxation.
Conclusion
The TVLH is not a new tax so much as a modernised and enlarged one: it extends a levy that was previously automatic only in pressure areas to the whole of France, at the option of each commune, and it concentrates all vacant-home taxation in a single article of the tax code. For a non-resident owner, three consequences follow. First, an empty furnished home in a pressure area will in most cases fall within the scope of the tax once vacancy reaches one year; the rates — 17 per cent, then 34 per cent, and up to 60 per cent where the commune so votes — are calculated on the cadastral rental value, not on the market rent, which in tourist areas keeps the exposure significant. Second, the exemptions are real but require proof: ninety consecutive days of occupation, genuine attempts to let or sell at market conditions, or substantial and documented renovation work. Third, the alternatives to vacancy — an ordinary residential lease, or a properly authorised seasonal letting — are legally effective ways to keep the property outside the tax, but they engage the change-of-use regime in the main cities and must be set up with the required authorisations, as the recent case law of the Cour de cassation makes clear.
Owners who bought before the reform should review the use and documentation of their French property before 31 December 2026, so that the vacancy period accumulated before 1 January 2027 does not trigger the tax at its first assessment. Where the home is genuinely furnished and used as a second home, the file of occupation evidence should be kept up to date. Where the home is empty, a letting or selling campaign at realistic conditions, or a documented renovation programme, should be launched early enough to be demonstrable to the administration. The new article 1406 bis of the CGI excludes dwellings whose vacancy is “indépendante de la volonté du contribuable” — and the taxpayer’s will, in the eyes of the administration, is evidenced by the documents on file. Foreign owners who wish to verify their position under the new rules, or who face a contested assessment, can obtain specific advice from a French real-estate law firm such as our real-estate team in Paris. Tax treatment is individual, and this article does not constitute tax advice; each situation — particularly where the property is held through a company, a trust or a SCI (real-estate holding company) — should be reviewed with a specialist before the end of 2026.