Luxury real estate taxation in France in 2026 involves several taxes and fiscal mechanisms that property owners must consider when purchasing, owning, renting out, selling or transferring a prestigious property. High-end apartments, luxury villas and exceptional properties do not fall into a specific tax category, but their high value can have significant consequences for acquisition costs, local property taxes, French Real Estate Wealth Tax (Impôt sur la Fortune Immobilière or IFI) and capital gains taxation. IFI applies to tax households whose net taxable real estate assets exceed €1.3 million on January 1 of the relevant tax year, with progressive rates ranging from 0.5% to 1.5%. Purchasing an existing property generally involves acquisition costs representing approximately 7% to 8% of the purchase price. For unfurnished rentals, rental income is generally taxed as property income (revenus fonciers), under either the micro-foncier or actual expenses tax regime, depending on eligibility. For furnished rentals, income falls under the Business Income category (Bénéfices Industriels et Commerciaux or BIC), with either Non-Professional Furnished Rental Landlord (LMNP) or Professional Furnished Rental Landlord (LMP) status. Under the actual expenses regime, certain expenses and depreciation may be deducted, but depreciation deducted under LMNP is generally taken into account when calculating capital gains upon resale for transactions subject to the rules introduced on February 15, 2025, subject to exceptions. Private real estate capital gains are generally subject to 19% income tax and 17.2% social contributions, before applicable allowances and exemptions. An additional tax may also apply to taxable capital gains exceeding €50,000. To organize ownership and inheritance planning for luxury real estate, property owners may consider a French property holding company (Société Civile Immobilière or SCI), a holding company, gifts or the division of ownership rights, following an assessment of legal and tax consequences. The profitability of a prestigious property investment must account for rental income, acquisition costs, maintenance, insurance, management fees, vacancy periods and taxation. Specializing in furnished rentals and property management since 1999, Lodgis helps owners of high-end properties estimate rental prices, find tenants and manage their apartments in Paris and major French cities.
Investing in luxury real estate in France offers an opportunity to build and enhance long-term wealth. Prestigious apartments in Paris, villas on the French Riviera, exceptional properties and high-end residences all have distinctive characteristics that require a thorough understanding of their tax implications.
What taxes apply to luxury real estate in France? How is rental income taxed? What are the advantages and limitations of a French property holding company (SCI) or Non-Professional Furnished Rental Landlord (LMNP) status?
From acquisition to resale, including renting out and transferring ownership, several tax rules must be considered to assess the actual profitability of a luxury property investment.
Specializing in furnished rentals and rental property management, Lodgis supports property owners, including owners of high-end accommodation, with renting out and managing their properties. Discover the main taxes applicable in 2026 and the strategies that can help you anticipate the costs associated with your real estate assets.
Luxury real estate is not defined solely by its purchase price. Several criteria contribute to a property's prestigious or high-end status:
However, there is no general French tax category specifically known as "luxury real estate".
A prestigious apartment is therefore subject to the usual property taxation rules. Nevertheless, its high value can result in greater taxation, particularly regarding French Real Estate Wealth Tax (IFI), property taxes and capital gains upon resale.
High-end property investments generally involve substantial acquisition costs and potentially significant maintenance expenses.
To assess profitability, investors should consider:
The profitability of a luxury property should therefore not be assessed solely on its market value or potential rental income.
Taxation of a prestigious property arises at four main stages: acquisition, ownership, rental and resale.
When buying real estate in France, purchasers must budget for acquisition costs, commonly referred to as "notary fees" (frais de notaire).
These costs generally include:
For existing properties, acquisition costs frequently represent approximately 7% to 8% of the purchase price, sometimes more depending on applicable rates and transaction characteristics. They are generally lower for newly built properties.
Example: for a luxury apartment purchased for €1,500,000, estimated acquisition costs of 7.5% would represent an additional €112,500.
These expenses must therefore be included in the acquisition budget from the outset, as they can significantly affect overall investment profitability.
French Real Estate Wealth Tax (Impôt sur la Fortune Immobilière or IFI) applies to tax households whose net taxable real estate assets exceed €1.3 million on January 1 of the relevant tax year.
This threshold is not assessed separately for each property. It applies to the household's entire taxable real estate portfolio.
Relevant assets may include:
Certain debts may be deducted under the conditions established by French law.
A qualifying primary residence generally benefits from a 30% allowance on its market value for IFI purposes.
Example: an owner holding a prestigious rental apartment worth €1,800,000 may be subject to IFI, depending on their overall property portfolio and the amount of tax-deductible debt.
The IFI tax scale is progressive, with rates ranging from 0.5% to 1.5%. Tax is calculated according to the applicable rules once the liability threshold has been reached.
In addition to IFI, property owners may be liable for several local taxes:
The amount of these taxes depends in particular on the property's characteristics and location.
When an owner rents out a luxury property, rental income is subject to taxation that primarily depends on the type of rental.
For unfurnished rentals, rental income is generally classified as property income (revenus fonciers).
Depending on eligibility, the owner may use the micro-foncier regime or the actual expenses regime.
Under the actual expenses regime, certain costs may be deductible, including mortgage interest, property management fees, insurance, property taxes and qualifying renovation work.
For furnished rentals, rental income is classified as Business Income (Bénéfices Industriels et Commerciaux or BIC).
The owner may qualify as a Non-Professional Furnished Rental Landlord (LMNP) or a Professional Furnished Rental Landlord (LMP), depending on their circumstances and the applicable tax conditions.
These two statuses have different rules, particularly regarding expense deductions, tax losses and capital gains.
For a luxury apartment rented furnished, the appropriate tax regime should be assessed according to rental receipts, maintenance expenses, financing arrangements and the intended holding period.
Selling a luxury property may result in real estate capital gains tax.
In simplified terms, the capital gain is the difference between the selling price and acquisition price, after authorized adjustments and deductions.
For individuals subject to the French private real estate capital gains regime, taxation generally includes:
Progressive allowances are available depending on the length of ownership.
Exemption from income tax on the capital gain is generally obtained after 22 years of ownership, while exemption from social contributions is generally obtained after 30 years.
The sale of a primary residence may qualify for an exemption, subject to the requirements established by law.
One consideration for high-value properties is that, when the net taxable capital gain exceeds €50,000, an additional tax on substantial real estate capital gains may apply, with progressive rates reaching up to 6%.
It is therefore important to anticipate the tax implications of resale, particularly when the property's value has increased considerably.
Furnished rentals are one possible strategy for owners wishing to generate income from a high-end property.
They can meet the needs of French and international tenants looking for fully equipped accommodation, sometimes for professional relocation or an extended stay.
LMNP (Loueur en Meublé Non Professionnel) is a French tax status applicable to landlords who rent out furnished properties without meeting the requirements for professional furnished rental status.
Rental receipts are taxed under the BIC category.
Two tax regimes may be available:
The actual expenses regime may be attractive for luxury properties when deductible expenses and depreciation are substantial.
However, since February 15, 2025, depreciation previously deducted is generally taken into account when calculating capital gains upon resale, subject to certain exceptions.
This factor should be included in any long-term investment strategy.
LMP (Loueur en Meublé Professionnel) status applies when both of the following tax conditions are met at household level:
LMP has specific rules relating to tax losses, professional capital gains and social security contributions.
However, it is not automatically more advantageous than LMNP.
The appropriate status and its tax consequences depend on the household's actual circumstances, the ownership structure and the rental activity.
Since 1999, Lodgis has supported landlords with marketing and managing furnished properties, including high-end apartments.
Thanks to its market expertise and French and international clientele, Lodgis helps you highlight your property's distinctive features and find suitable tenants.
Depending on the package selected, our teams can assist with rental price estimation, property advertising, tenant selection and rental management.
Several strategies can help organize the ownership and management of high-end real estate assets.
However, their suitability depends on the owner's personal circumstances, rental strategy, wealth management objectives and applicable tax regulations.
Renovation work can improve a property's comfort, energy efficiency and market value.
Depending on the applicable tax regime, certain expenses may also be tax-deductible.
For unfurnished rentals under the actual expenses regime, qualifying maintenance, repair and improvement work may be deductible according to French law.
For furnished rentals under the actual expenses regime, some expenditure may be classified as deductible expenses or depreciable capital assets.
It is particularly important to distinguish routine work from construction, reconstruction or extension work, which is subject to different tax treatment.
A Société Civile Immobilière (SCI) is a French property holding company that allows several individuals to own and manage real estate assets through a shared legal structure.
It may help with:
An SCI may be subject to personal income tax (Impôt sur le Revenu or IR) or corporate income tax (Impôt sur les Sociétés or IS), depending on its tax position and any elections made.
An SCI subject to IR is generally tax-transparent, meaning that taxable results are attributed to the shareholders under the applicable rules.
An SCI subject to IS is taxed on its own profits, with different rules concerning expenses, depreciation and capital gains.
Important: regularly renting out furnished accommodation through an SCI may result in the company becoming subject to corporate income tax, except where regulatory exceptions apply.
An SCI is therefore not a universal tax-saving solution. Its suitability should be assessed with a legal or tax professional.
A holding company is a company that owns shares or interests in other companies.
In certain wealth management structures, it can be used to organize several investments, structure their financing or prepare for asset transfers.
However, creating a holding company also involves operating costs, accounting obligations and specific tax rules.
It does not automatically reduce inheritance tax or exempt property assets from IFI.
This type of structure therefore requires careful analysis, particularly when the portfolio includes several high-value properties.
Estate and succession planning is an important consideration for owners of high-value properties.
Depending on family circumstances and personal objectives, several options may be considered:
These mechanisms may help anticipate how assets will be distributed and organize the tax implications of transferring wealth.
The applicable taxes depend on the family relationship, the value transferred, available allowances and any previous gifts.
Consulting a notary or tax advisor is particularly recommended for substantial real estate portfolios.
The profitability of a high-end apartment should not be calculated solely on the basis of annual rental income and the acquisition price.
For a more realistic assessment, all property-related expenses must be considered.
Prestigious properties may require more expensive maintenance, particularly when they include specific features such as swimming pools, large terraces or complex technical installations.
Gross rental yield is calculated by dividing annual rental income by the total investment cost and multiplying the result by 100.
Gross rental yield (%) = (Annual rent excluding charges / Total investment cost) × 100
Example:
For an apartment purchased for €1,500,000 and generating €60,000 in annual rental income:
(60,000 / 1,500,000) × 100 = 4%
This 4% yield is a simplified calculation based solely on the purchase price. It does not include acquisition fees, renovation work or other expenses. The gross yield calculated on the total investment cost would therefore be lower if additional costs were incurred.
Net rental yield must account for the expenses actually paid by the property owner. An after-tax assessment must also consider the owner's personal tax circumstances.
An attractive gross rental yield does not necessarily guarantee a high net return.
For investors owning several properties or high-value apartments, appropriate rental property management can help monitor income, expenses and relationships with tenants.
Owning a high-end apartment requires particular attention to property presentation, tenant selection and the quality of ongoing rental management.
Lodgis supports landlords with furnished rentals and property management in Paris and major French cities.
Thanks to its knowledge of the rental market, Lodgis helps you position your property and estimate an appropriate rental price.
Location, equipment, furniture quality and high-end amenities are all taken into account when developing a suitable marketing strategy.
With a French and international customer base, Lodgis helps find tenants for a wide range of furnished properties, including luxury apartments.
Our teams assist with marketing, organizing viewings and reviewing rental applications.
Depending on the package selected, Lodgis can assist with:
Our rental property management packages are available from 3.9% including VAT of rental income, depending on the package selected.
Lodgis specializes in real estate and rental management. For complex tax matters related to owning, selling or transferring property assets, it remains advisable to consult a chartered accountant, notary or specialist tax lawyer.
There is no general tax exclusively reserved for luxury real estate in France.
However, the high value of these properties can result in significant taxation, particularly through French Real Estate Wealth Tax (IFI), local property taxes and capital gains taxes.
IFI applies to tax households whose net taxable real estate assets exceed €1.3 million on January 1 of the relevant tax year.
This threshold applies to the household's entire taxable real estate portfolio, not to each property individually.
Income from a furnished rental apartment is generally taxed under the Business Income category (Bénéfices Industriels et Commerciaux or BIC).
Depending on their circumstances, landlords may qualify for Non-Professional Furnished Rental Landlord (LMNP) or Professional Furnished Rental Landlord (LMP) status.
An SCI may help organize property ownership and the transfer of real estate assets.
However, its tax advantages depend on the applicable tax regime, the activity carried out and the shareholders' circumstances.
It does not guarantee lower taxes and may introduce additional obligations.
Private real estate capital gains are generally subject to 19% income tax and 17.2% social contributions, after any applicable allowances.
An additional tax may apply when the taxable capital gain exceeds €50,000. Certain exemptions are available, particularly for qualifying primary residences.
Certain renovation expenses may be deductible from rental income depending on the nature of the work and the applicable tax regime.
For furnished rentals under the actual expenses regime, some expenditure may also be depreciated.
It is essential to distinguish deductible expenses from costs that must be capitalized or are not eligible for tax deduction.
Lodgis supports property owners with marketing, finding tenants and managing furnished accommodation, including high-end apartments.
Its market expertise and international customer base allow it to provide services tailored to the property's characteristics and the landlord's requirements.
Luxury real estate taxation in France involves several mechanisms that must be considered throughout the property ownership period.
Property owners should particularly account for:
LMNP and LMP statuses, French property holding companies (SCI) and the different tax regimes may offer advantages depending on the owner's situation. Choosing an appropriate structure always requires an individual assessment.
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