International tax lawyer in Paris: French real estate from abroad.

Yes, as a general rule. Article 164 B of the General Tax Code classes income from property located in France as French-source income, and tax treaties as a rule leave the right to tax real estate income to the State where the property is situated, as illustrated by the Franco-Luxembourg treaty of 1 April 1958 applied by the Court of Cassation to property holding companies (SCI) (Cass. com., 2 April 2025, No. 23-14.568). Rents are therefore declared in France, whatever the owner's residence. The State of residence may also tax them, but must eliminate the double taxation using the method provided by the treaty.

For the calculation, Article 197 A applies the income tax scale with a minimum rate of 20% up to the upper limit of the second bracket, then 30% above it. An owner who shows that the average rate calculated on all their worldwide income would be lower obtains application of that rate to their French income. Point b of the same article, which allows certain maintenance payments to be deducted in this calculation under conditions, was challenged by a non-resident: the Council of State refused to refer the priority preliminary ruling on constitutionality (QPC) to the Constitutional Council, as it raised no serious question (CE, 3 February 2023, No. 468904), which went against them. The firm therefore gathers the foreign returns and evidence of worldwide income before opting, because the average rate is never presumed.

It is liable in principle. Article 990 D of the General Tax Code subjects to an annual tax equal to 3% of market value the legal entities, legal persons, bodies, fiduciary arrangements (fiducies) or comparable institutions that own property located in France, directly or through an intermediate entity. The tax is due each year on property owned on 1 January (Article 990 F). The Court of Cassation holds that "every entity is liable to the 3% tax on the market value of the property it owns in France, unless it shows that it falls within one of the cases listed by the latter" (Cass. com., 10 May 2024, No. 21-11.230) (our translation). In that case, the foundation that owned a villa lost: its appeal was dismissed.

The exemption depends on Article 990 E. For an entity whose registered office is in France, in the European Union or in a State bound to France by an administrative assistance agreement or a non-discrimination treaty, it requires in particular that the property owned on 1 January and the identity of the shareholders holding more than 1% of the rights be declared each year by 15 May at the latest. Other cases exist, such as a predominance of non-real-estate assets or listing on a regulated market. A company established in a State that falls into none of these categories cannot escape the tax through its declarations alone. The firm therefore examines the State of registered office of each entity before reaching a conclusion.

It risks being taxed for all the years that the tax authorities can still reassess. The administrative doctrine accepts that an entity that could have claimed the exemption may regularise its returns within thirty days of a formal notice, without paying the tax. This tolerance is strictly limited: referring to an earlier ministerial reply, the Court of Cassation noted that taxpayers who file their returns within the period of the formal notice may be exempted, "this tolerance measure applying only to the first request for regularisation" (Cass. com., 4 November 2020, No. 18-11.771) (our translation). The company that had already benefited from a regularisation was held liable for the tax: the decision went against it.

The Court of Cassation also set aside, in 2026, a court of appeal that had not examined whether the tax authorities had disregarded their own doctrine by demanding payment of the tax in the formal notice itself (Cass. com., 8 July 2026, No. 25-12.737). The firm therefore checks the date and content of the formal notice, the existence of an earlier tolerance, the years concerned and the accuracy of the information given about the shareholders. A regularisation return needs careful preparation: it is often the only opportunity to benefit from the tolerance, and the declared identity of the shareholders must match the reality on each 1 January concerned.

The trust falls within the scope of the tax. The Council of State held that trusts, including those without legal personality, are institutions comparable to the fiducie and that French property placed in them is subject to the annual 3% tax (CE, 9 May 2019, No. 426431). The exemption remains possible, but it requires identifying each year the persons who hold the rights.

This identification raises a difficulty specific to structures without shareholders. For a foundation that declared only a future beneficiary, the Court of Cassation held that "Only the real economic beneficiaries, as at 1 January of the tax year, of the legal entities concerned, and not potential beneficiaries, may be treated as the shareholders, partners or other members who hold, in any capacity, more than 1% of the shares, units or other rights" (Cass. com., 10 May 2024, No. 21-11.230) (our translation). The foundation therefore did not obtain the exemption. Conversely, concerning a company whose shares had been held by a trustee, the Court held that "the trustee, whose estate, within the meaning of the tax provisions governing the ISF, does not include the assets transferred to the fiducie, cannot be considered a shareholder" (Cass. com., 8 July 2026, No. 25-12.737) (our translation): the court of appeal had to examine whether the returns naming the settlor as shareholder gave sufficient information. The firm examines the constitutive deed, the status of the beneficiaries on each 1 January and the chain of companies held, before any return or claim.

Article 990 F of the General Tax Code designates as the taxpayer the legal person or persons closest to the property in the chain that are not exempted through the declaration route. The entities interposed between that taxpayer and the property are jointly liable for payment. Two 2026 judgments draw from this distinction a procedural consequence favourable to the tax authorities.

In the first, the Court of Cassation holds that the tax authorities are not required to notify the documents following the proposed reassessment to all the interposed entities, "these interposed entities being only jointly liable for its payment and not the legal taxpayers of this tax" (Cass. com., 28 May 2026, No. 24-18.404) (our translation). In the second, a trust held the property through two successive companies; the Court holds that the tax authorities did not have to notify the procedure to the "legal persons interposed between the trust, the legal taxpayer of the 3% tax on the market value of the property, and the property in question" (Cass. com., 16 September 2026, No. 25-11.299) (our translation). The two court of appeal judgments that had annulled the procedures were set aside. The argument based on failure to notify an intermediate company must therefore be abandoned. The discussion shifts to the exact identification of the taxpayer, the value adopted and the conditions of the exemption, which the firm examines link by link.

Yes where the net value of their taxable real estate assets exceeds €1,300,000. Article 964 of the General Tax Code subjects individuals who are not tax-resident in France to the real estate wealth tax on property located in France and on shares in companies, up to the portion of their value representing that property. Article 965 extends the tax base to assets held indirectly through French or foreign companies.

The tax treaty may reserve the right to tax real estate wealth to the State where the property is situated, but it often refers to domestic law to define its own terms. Under the former wealth tax (impôt de solidarité sur la fortune), the Court of Cassation held that the concept of property-rich company provided for by the Franco-Russian treaty "must have the meaning given to it by the provisions of Article 750 ter, 2°), paragraphs 1, 2 and 4 of the General Tax Code" (Cass. com., 6 May 2026, No. 24-22.185) (our translation). The taxpayer who argued for a narrower reading of the treaty lost. The firm therefore calculates the French real estate portion of each holding, checks the applicable treaty and the definition it adopts, then prepares the return or the response to the tax authorities.

It depends on the applicable treaty and the tax concerned. For partners resident in Luxembourg, the Court of Cassation held, under the ISF and the Franco-Luxembourg treaty of 1 April 1958, that "shares in property holding companies (sociétés civiles immobilières) having their registered office in France and owning real estate located in France must be regarded as real estate within the meaning of the treaty" (Cass. com., 2 April 2025, No. 23-14.568) (our translation). It added that the results of these companies had to be taxed in France under the treaty, regardless of whether they have their own tax personality. The taxpayers' appeal was dismissed: the decision went against them.

A foreign investor who holds a Paris flat through an SCI therefore cannot presume that interposing a company turns real estate into a mere movable shareholding taxable only in their State of residence. Each treaty must be read: some expressly refer to property-rich companies, others refer to domestic law, and others contain special rules for capital gains. The firm examines the articles of association, the tax regime of the SCI, the composition of its assets and the treaty of each partner's State of residence, before determining the French returns and the expected tax burden.

The capital gain is subject to a specific levy provided for by Article 244 bis A of the General Tax Code. It applies to individuals who are not tax-resident in France and to legal persons whose registered office is outside France, subject to international treaties. Individuals are subject to a rate of 19%; for legal persons, the text refers to the standard corporate income tax rate, with special rules for those established in the European Union or the European Economic Area. The levy is paid when the sale deed is registered.

The comparison with residents has given rise to litigation. A seller resident in Monaco, taxed at the corporate income tax rate then applicable, had obtained relief for the portion exceeding 19%. The Council of State held that EU law only precluded a levy above that rate and dismissed the appeal seeking a full discharge (CE, 23 June 2022, No. 445785). The firm reconstructs the acquisition price, the documented costs and works and the holding period, examines the treaty and the possible exemptions, then prepares with the notary the capital gains return annexed to the deed.

It depends on their State of residence and on the transaction. Under Article 244 bis A of the General Tax Code, the levy is paid under the responsibility of a representative established in France and accredited by the tax authorities. The obligation does not apply where the seller is domiciled, established or incorporated in a State of the European Union or the European Economic Area bound to France by an administrative assistance agreement and a recovery assistance agreement.

Where the seller is a French partnership or a European structure with an equivalent regime, the obligation is assessed at the level of each partner.

For individual sellers established outside that scope, the administrative doctrine (BOI-RFPI-PVINR-30-20) provides for an automatic exemption in several cases, in particular where the sale price does not exceed €150,000, a threshold assessed per seller but with a married or civil-partnered couple subject to joint taxation counted as a single seller, where the holding period results in full exemption from both income tax and social contributions, or where the sale concerns a former main residence that is exempt. These exemptions do not apply to a company or body whose registered office is outside the European Union and the European Economic Area: the same doctrine maintains an accredited representative for them, whatever the price and the nature of the sale. The person drawing up the deed assesses these criteria themselves. The same doctrine recalls that practising as a lawyer is incompatible with the activity of tax representation: the firm therefore cannot take on that role. It can, however, check whether an exemption applies, prepare the capital gains calculation and the supporting documents, and coordinate the sale with the notary and the accredited representative chosen by the seller.

Two distinct exemptions exist and their conditions must not be confused. The first concerns the property that was the main residence in France on the day of departure, where the seller settles in an EU State or in a State bound to France by an administrative assistance agreement and a recovery assistance agreement of a scope similar to Directive 2010/24/EU, provided that State is not a non-cooperative State within the meaning of Article 238-0 A: the sale must take place by 31 December of the year following the transfer of residence at the latest, and the home must not have been made available to third parties in the meantime (Article 244 bis A, I, 1).

The second, provided for in point 2° of II of Article 150 U of the General Tax Code, benefits the non-resident who is a national of an EU or European Economic Area State bound to France by an administrative assistance agreement, and who was continuously tax-resident in France for at least two years. It is limited to one residence and to €150,000 of net taxable capital gain. The sale must take place by 31 December of the tenth year following departure at the latest, or without any time limit if the seller has had unrestricted use of the property since 1 January of the previous year. The firm checks nationality, State of residence, date of departure, use of the home since then and the absence of any earlier exemption, document by document.

French inheritance tax remains due on the property. Where the deceased was not tax-resident in France, Article 750 ter, 2°, of the General Tax Code subjects to inheritance and gift tax the assets located in France, and in particular property owned directly or indirectly. Indirect holding is found where the property belongs to a company in which the deceased, alone or with their spouse, ascendants, descendants or siblings, holds more than half of the rights, whatever the number of intermediate companies.

The same text deems French the shares of unlisted foreign companies whose assets consist mainly of French property, in proportion to the value of that property. Interposing a foreign company therefore does not take the Paris flat out of an estate taxable in France. A bilateral inheritance treaty, where one exists between France and the State concerned, may change this result and must be read before any return. The firm examines the deceased's residence, the ownership chain, any treaty, the value of the property on the date of death and the return to be filed, together with the notary in charge of settling the estate.

The generalised social contribution (CSG) applies in principle to income from property located in France received by persons not tax-resident in France (Article L. 136-6, I bis, of the Social Security Code). The same article provides for an exception: persons who, for health insurance purposes, fall under legislation subject to the European regulation coordinating social security systems and who are not dependent on a French compulsory scheme are not liable.

This exception does not remove all levies. Article 235 ter of the General Tax Code introduces a solidarity levy on the same investment income, at the rate of 7.5%, and specifies that it applies regardless of the exception provided for insured persons covered by another State. An investor affiliated to the social security system of an EU State therefore pays, in principle, this solidarity levy without the CSG. Entitlement to the exception depends on the applicable health insurance legislation and on the absence of cover by a French compulsory scheme, not on the State of residence alone. The firm checks the certificate of affiliation, the classification of the income and the notices received, then prepares a claim where contributions were wrongly levied on years that are still open.

The 3% tax and the IFI are assessed on the market value of the property on 1 January. The Court of Cassation defines this concept consistently: "the market value of a property corresponds to the price that could be obtained through the interplay of supply and demand on a real market, taking into account the factual and legal situation in which the property stands at the time of the event giving rise to the tax" (Cass. com., 27 March 2019, No. 18-10.933) (our translation). In that case, a married couple argued that the co-ownership in undivided shares of their main residence justified a discount. The court of appeal held that the co-ownership did not affect the value, in the absence of any plan to sell a share, and the appeal was dismissed: the decision went against the taxpayers.

The same judgment upholds a proposed reassessment that described the property precisely and used, for each year, three comparable sales located in the same Paris arrondissement. The useful discussion therefore concerns the relevance of the comparables, the surface area, the condition of the property, its rental situation or its legal constraints, rather than a discount in principle. The firm gathers the deeds, the diagnostic reports, the current leases and the comparable sales, then checks whether the elements adopted by the tax authorities really describe the property in the factual and legal situation in which it stood on the date of taxation.

The conflict is settled by the treaty, not by French law alone. Article 4 B of the General Tax Code looks in particular at the household, the main place of stay, professional activity and the centre of economic interests. An investor who owns substantial real estate in France may thus be claimed by the French tax authorities while another State regards them as its resident. Treaties then contain successive criteria to decide between the two States.

In a Franco-Swiss case, the court of appeal had required the taxpayers to prove their Swiss residence within the meaning of the treaty, although they were taxed in Switzerland on a lump-sum (expenditure-based) basis. The Court of Cassation set that judgment aside: since both tax authorities recognised the persons concerned as residents, there was a residence conflict, "from which it follows that there is a conflict of tax residence requiring application of Article 4, paragraph 2, of the Convention of 9 September 1966" (Cass. com., 24 November 2021, No. 19-14.013) (our translation). This outcome is favourable to the taxpayers, but it does not prejudge the result of applying the treaty criteria. The firm gathers the foreign residence certificates, the chronology of stays, the location of the household and of interests, then tests these elements against the criteria of the applicable treaty.