Authored by the expert who managed and guided the team behind the France Property Pack
Yes, the analysis of Paris' property market is included in our pack
Dreaming of owning a piece of the City of Light? Paris is a captivating place to invest in property, but understanding the taxes and fees involved is crucial before making a purchase.
What are the costs you need to be aware of? Are there any hidden fees? How do these taxes compare to other cities?
In this article, we'll break down everything you need to know about property taxes and fees in Paris.
Actually, we know this market inside and out. We keep tabs on it regularly, and all our discoveries are reflected in the most recent version of the France Property Pack
Property Taxes and Fees in Paris
In Paris, property owners are subject to various taxes and fees. Below is a detailed table outlining the main property-related taxes and fees, along with their characteristics and estimated costs.
| Tax/Fee | Description | Estimated Cost |
|---|---|---|
| Taxe Foncière | An annual property tax levied on property owners, based on the cadastral rental value of the property. | Varies, typically 0.1% to 0.3% of property value |
| Taxe d'Habitation | A residence tax paid by the occupant of a property, whether owner or tenant, based on the rental value of the property. | Gradually being phased out; varies by income and property size |
| Contribution Economique Territoriale (CET) | A local business tax for property owners who use their property for business purposes. | Depends on business revenue and property value |
| Frais de Notaire | Notary fees incurred during the purchase of a property, covering administrative and legal services. | Approximately 7% to 8% of the property purchase price |
| Taxe sur les Logements Vacants | A tax on vacant properties to encourage owners to rent out or sell unused properties. | 12.5% to 25% of the rental value |
| Taxe d'Aménagement | A development tax applied to new constructions or significant renovations. | Varies based on project size and location |
| Charges de Copropriété | Condominium fees for shared property maintenance and services. | Varies, typically €20 to €50 per square meter annually |
| Impôt sur la Plus-Value Immobilière | Capital gains tax on the profit from selling a property, applicable to non-primary residences. | 19% plus social contributions |
| Taxe de Séjour | A tourist tax collected from guests staying in short-term rental properties. | €0.20 to €4 per person per night |
| Assurance Habitation | Home insurance covering property damage and liability. | €150 to €500 annually |
| Taxe d'Enlèvement des Ordures Ménagères (TEOM) | A waste collection tax included in the property tax bill. | Varies, typically 5% to 15% of the rental value |
| Frais de Gestion Locative | Property management fees for rental properties, covering tenant management and maintenance. | 5% to 10% of annual rental income |
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What You Need to Know Before Buying Property in Paris
What is the property tax rate in Paris?
The property tax rate in Paris, known as "taxe foncière," is relatively low compared to other French cities.
As of 2023, the average rate is approximately 13.5% of the property's cadastral rental value.
This rate can vary slightly depending on the specific arrondissement and the type of property.
Are there any additional fees when purchasing a property in Paris?
Yes, buyers should be aware of notary fees, which typically range from 6% to 8% of the property's purchase price.
These fees cover the notary's services and various administrative costs associated with the transaction.
Additionally, there may be agency fees if a real estate agent is involved, usually around 3% to 5% of the sale price.
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How is the "taxe d'habitation" calculated for property owners?
The "taxe d'habitation" is a residence tax that property owners or tenants must pay, calculated based on the property's rental value and the household's income.
In Paris, this tax has been progressively reduced and is expected to be completely abolished for primary residences by 2023.
However, secondary residences are still subject to this tax, with rates varying by arrondissement.
What are the capital gains tax implications for selling property in Paris?
Capital gains tax applies to the profit made from selling a property, with a standard rate of 19% plus social charges of 17.2%.
However, exemptions exist, such as for primary residences or if the property has been held for more than 22 years.
It's important to consult with a tax advisor to understand specific exemptions and reductions applicable to your situation.
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How does the "taxe foncière" differ for commercial properties?
Commercial properties in Paris are subject to a higher "taxe foncière" rate compared to residential properties.
The rate can be as high as 30% of the property's cadastral rental value, depending on the location and type of business.
Owners should also consider additional taxes such as the "CFE" (Cotisation Foncière des Entreprises) for businesses.
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What is the average cost of property per square meter in Paris?
As of 2023, the average cost of property in Paris is approximately €10,500 per square meter.
This price can vary significantly depending on the arrondissement, with central areas like the 6th and 7th being more expensive.
Buyers should research specific neighborhoods to understand the market dynamics and price variations.
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Are there any tax incentives for energy-efficient renovations?
Yes, the French government offers tax credits and incentives for energy-efficient renovations, known as "CITE" (Crédit d'Impôt pour la Transition Énergétique).
These incentives can cover up to 30% of the renovation costs, depending on the type of work and materials used.
It's advisable to consult with a professional to ensure eligibility and maximize potential savings.
What are the inheritance tax implications for property in Paris?
Inheritance tax in France is based on the relationship between the deceased and the heir, with rates ranging from 5% to 45%.
Direct descendants benefit from a tax-free allowance of €100,000 per parent, per child.
It's crucial to plan ahead and consider estate planning strategies to minimize tax liabilities.
How does the "taxe d'enlèvement des ordures ménagères" affect property owners?
This is a waste collection tax that property owners must pay, calculated as a percentage of the "taxe foncière."
In Paris, the rate is typically around 8% of the property's cadastral rental value.
Owners should check their annual tax notice for the exact amount due.
What are the implications of owning a property in a co-ownership building?
Owning a property in a co-ownership building means sharing responsibility for common areas and maintenance costs.
Owners must pay monthly or quarterly co-ownership fees, which can range from €20 to €50 per square meter annually.
It's important to review the building's financial statements and meeting minutes before purchasing.
How does the "taxe sur les logements vacants" impact property owners?
This tax applies to properties that are left vacant for more than one year, encouraging owners to rent or sell unused properties.
In Paris, the rate is 12.5% of the property's rental value for the first year and 25% for subsequent years.
Owners should consider renting out their property to avoid this tax and generate additional income.
What are the legal requirements for renting out a property in Paris?
Property owners must comply with local regulations, including registering the property with the city and adhering to rent control laws.
Short-term rentals, such as those on Airbnb, are subject to strict regulations and require a registration number.
It's advisable to consult with a legal expert to ensure compliance and avoid potential fines.