What taxes apply to a second home?

Housing tax on second homes: confirmed continuation

The abolition of housing tax on primary residences, effective since 2023 [1][2], does not apply to second homes. They remain subject to housing tax on second homes (THRS), with a possible surcharge in certain municipalities.
THRS is calculated based on the property's cadastral rental value, multiplied by the rates set by the municipality and intermunicipal authority. The amount therefore varies depending on the property's location and characteristics. Since 2023, owners must also declare how their properties are occupied through their “Gérer mes biens immobiliers” (“Manage my properties”) account on impots.gouv.fr.

Municipalities located in high-demand areas, as well as, since 2024, municipalities with a high proportion of second homes, may introduce a surcharge of 5% to 60% on the municipal share of the tax
An exemption from this surcharge may be requested in certain cases: a property required due to professional obligations, a former primary residence that has become a long-term care facility, or a property that is uninhabitable for reasons beyond the owner's control. The request must be submitted as a claim to the public finance centre indicated on the tax notice.

Property tax and TEOM

Property tax is the second annual tax levied on a second home. It is based on the property's cadastral rental value, with rates set by local authorities.

TEOM, the household waste collection tax, is calculated on the same basis and varies according to the municipality.

Energy performance also affects the cost of ownership: a poorly insulated second home can be expensive to heat and maintain, while an F or G energy rating can reduce its resale value.

Some municipalities also grant a temporary property tax exemption following energy-efficiency renovation work: check with your local authority.

Calculating capital gains tax when selling

Selling a second home triggers taxation on the capital gain realised, with allowances depending on the length of ownership.

The taxable capital gain corresponds to the sale price minus the adjusted acquisition price: acquisition costs (7.5% flat rate or actual costs) and renovation work (15% flat rate after five years of ownership, or actual invoices).

Allowances of 6% per year from the 6th to the 21st year, followed by 4% in the 22nd year, result in an income tax exemption after 22 years; social contributions are fully exempt after 30 years.

The overall rate consists of 19% income tax and 17.2% social contributions. A surcharge of 2% to 6% applies to taxable capital gains exceeding €50,000.

Calculation example: property purchased for €200,000 in 2016 and sold for €350,000 in 2026 (10 years of ownership).

To accurately anticipate the taxable amount, estimate the value of your second home with confidence.

Then speak with an Engel & Völkers advisor to develop your sales strategy, in consultation with your notary.

Where is your second home located?

• Côte d’Azur

• Saint-Tropez

• Deauville

• Biarritz

• Chamonix-Mont-Blanc

IFI, bare ownership and furnished rental: reducing the tax burden

Several legal mechanisms can help reduce the tax burden associated with a second home, including IFI, bare ownership arrangements and furnished rental.

IFI applies once net real estate assets reach €1.3 million. The second home is included in the taxable base at its market value, according to a progressive scale of 0.5% to 1.5%.

Bare ownership can, for example, be transferred as a gift while retaining usufruct. In principle, the usufructuary declares the property for IFI purposes at its full ownership value; however, donating bare ownership reduces gift tax, which is calculated based solely on the value of the bare ownership (Article 669 of the French General Tax Code).

Short-term furnished rentals are subject, under the micro-BIC regime, to a 30% allowance up to €15,000 in revenue for an unclassified furnished tourist rental, and 50% up to €77,700 for a classified rental, following the reform introduced at the end of 2024.

The distinction between an unoccupied second home and a property rented out as furnished accommodation determines the appropriate wealth strategy. Housing tax may still apply if the property remains furnished and available to the owner for part of the year.

Luxury seasonal rental and investment in a listed historic monument, which under certain conditions allows restoration costs to be deducted, offer two additional options.

Valuing and maximising the value of your second home with Engel & Völkers

The taxation of a second home needs to be managed at every stage: ownership, rental, resale and transfer.

We offer free property valuations, sales support and investment advice for prime real estate. An accurate valuation helps anticipate taxable capital gains and adjust your resale or ownership strategy.

Whether you wish to sell your second home or seek advice on investing in prime real estate, our teams support you throughout your project. For personal tax questions, please consult your notary, tax advisor or the tax authorities.

An exceptional second home to sell?

Engel & Völkers Private Office supports the sale of the most prestigious properties, with a dedicated advisor and absolute discretion.