🔹 Introduction
Publication date: February 8, 2026
When an individual is a French tax resident, they are subject to unlimited tax liability and must therefore declare in France all of their income, including income derived from real estate located abroad.
The taxation of foreign real estate income is based on the interaction between French domestic tax law and international tax treaties, which may give rise to practical uncertainties.
The purpose of this guide is to present, in a structured manner, the rules applicable to foreign real estate income received by French tax residents, in particular with respect to tax residence, income taxation, social contributions, and reporting obligations.
The situations of non-French tax residents are not covered by this guide.
I. French tax residence and unlimited tax liability
1. The concept of French tax residence
The tax treatment applicable to real estate income earned abroad primarily depends on the taxpayer’s status as a
French tax resident.
Under French tax law, an individual is considered a
French tax resident if they meet at least one of the following criteria:
🔹 their household or main place of residence is located in France;
🔹 they carry out their main professional activity in France;
🔹 the centre of their economic interests is located in France.
Where one of these criteria is met, the taxpayer is regarded as a French tax resident, regardless of their nationality or the location of their assets.
For more information on the concept of tax residence, I invite you to consult the dedicated FAQ.
2. The principle of unlimited tax liability
📌 Pursuant to Article 4 A of the French General Tax Code, “persons whose tax residence is in France are liable to income tax in respect of all their income.”
👉 Accordingly, a French tax resident is subject to unlimited tax liability.
This means that France, as a matter of principle, taxes all worldwide income, regardless of its source or where it is generated.
As such, real estate income derived from property located abroad (rental income, rents, and similar income) falls within the scope of French taxation, even where such income is already taxed in the country in which the property is located.
This reporting obligation applies regardless of the amount of income and regardless of whether the income is taxed abroad.
II. Are foreign real estate income taxed in France?
When a French tax resident receives real estate income from property located abroad, the issue is not merely one of reporting, but rather whether such income is actually taxed in France.
The answer mainly depends on the existence of an international tax treaty between France and the country in which the property is located.
1. Absence of a tax treaty between France and the country where the property is located
Where the real estate property is located in a country not bound to France by a tax treaty, the corresponding income is taxable in France under French domestic tax law.
In such a case:
🔹 France taxes foreign real estate income pursuant to the principle of unlimited tax liability;
🔹 Any tax paid abroad does not give rise to any treaty-based mechanism for the elimination of double taxation.
🚨 Actual double taxation may therefore arise (taxation abroad and in France).
👉 This situation calls for particular caution, as corrective mechanisms are very limited in the absence of a tax treaty.By way of example (non-exhaustive list), this situation may concern certain countries such as Haiti, Costa Rica, Fiji, the Bahamas, etc.
⚠️ Since 2023, several tax treaties have also been terminated, in particular those concluded with Russia, Belarus and Burkina Faso.
2. Existence of an international tax treaty
In the vast majority of cases, France has concluded an international tax treaty with the country in which the property is located.
These treaties generally provide that real estate income is taxable in the State where the property is situated, i.e. in the country generating the rental income.
However, this treaty rule does not exempt the taxpayer from their obligations in France.
👉 Pursuant to Article 4 A of the French General Tax Code, foreign real estate income must be reported in France, even where such income is taxable exclusively abroad under the applicable tax treaty.
In order to avoid double taxation, tax treaties then provide for mechanisms to eliminate double taxation, mainly:
🔸 the granting of a tax credit equal to the corresponding French tax; or
🔸 an exemption method with inclusion for the purposes of calculating the effective tax rate.
Some treaties provide for more specific or atypical mechanisms.
By way of example, the tax treaty concluded with Turkey is based on a specific tax credit mechanism, which is less commonly encountered in practice.
3. Focus on methods for eliminating double taxation
Where a tax treaty applies, it is common to state that foreign real estate income is “not taxed in France.”
This statement must nevertheless be qualified.
Indeed, even where no tax is effectively due in France in respect of such income:
🔹 foreign real estate income is taken into account for the calculation of the overall tax rate applicable to other income taxable in France;
🔹 it therefore contributes to maintaining the progressivity of the French income tax.
This inclusion may have a significant impact on the taxpayer’s overall tax burden, by increasing the tax rate applicable to French-source income.
📘 Example: Impact of foreign real estate income on French income tax – tax credit method
A British national, resident for tax purposes in France, is employed in France and also owns a rental property located in the United Kingdom.
💼 Net taxable employment income: €70,000
👤 Family situation: single, no dependants
➡️ French income tax due on employment income: €12,065
The taxpayer also receives net taxable rental income in the United Kingdom amounting to €25,000, which must be reported in France.
🏠 Foreign real estate income: €25,000
📊 French tax calculated on total income (€95,000): €20,025
Under the France–UK tax treaty, France grants a tax credit equal to the French tax corresponding to the foreign real estate income i.e. €5,689
➡️ Final French tax due (on employment income): €14,336 (€20,025 – €5,689)
⚠️ The tax borne by the taxpayer on their employment income therefore increases by €2,271, despite the elimination of double taxation.
This difference is explained by the progressivity of the income tax scale, as the foreign real estate income increases the tax rate applicable to the employment income.
👉 This example illustrates that foreign real estate income may have a significant tax impact in France, even where it is not taxed as such.
The same logic applies where double taxation is eliminated through the exemption with effective rate method (tax treaties with Ireland, Greece, Portugal, etc.).
III. Applicable tax regimes and reporting obligations
The determination of the applicable tax regime and the relevant reporting requirements primarily depends on the nature of the rental activity, namely whether the income arises from furnished or unfurnished property.
In both cases, the taxpayer generally has the choice between a simplified forfaitary regime (micro) and a real regime, with significantly different tax consequences.
1. Furnished rental income
Income derived from furnished rentals falls within the scope of industrial and commercial profits (BIC) for French tax purposes.Two tax regimes may apply.
🔹 The micro-BIC regime
The micro-BIC regime is a simplified forfaitary regime.
It is based on a straightforward principle: the French tax authorities do not take into account the expenses actually incurred by the taxpayer, but instead apply a standard lump-sum allowance deemed to represent such expenses.
Where the annual gross rental income does not exceed €15,000, this regime may apply.
Under this regime:
🔸 the taxpayer reports the gross amount of rental income received;
🔸 the tax authorities automatically apply a 30% lump-sum allowance, deemed to cover all expenses (insurance premiums, loan interest, management fees, etc.);
🔸 the taxable income therefore corresponds to 70% of the gross rental income, irrespective of the expenses actually incurred.
This regime offers administrative simplicity, but it may prove unfavourable where the actual expenses exceed the standard allowance.
🔹 The real regime
Conversely, the real regime is based on the determination of the actual net taxable income.It notably allows the deduction of:
🔸 insurance premiums;
🔸 loan interest;
🔸 repair expenses;
🔸 management fees;
🔸 certain taxes and charges related to the operation of the property.
The real regime also allows, subject to certain conditions, the deduction of depreciation, in particular on the value of the building (excluding the land) and on furniture.
Such depreciation may constitute a major tax optimisation tool, significantly reducing, or even neutralising, the taxable result.In return, this regime entails more extensive reporting obligations.
In practice, it requires the filing of a profit and loss statement, even where the property is located abroad.
👉 For this reason, recourse to a professional is, in practice, strongly recommended.
2. Unfurnished rental income
Income derived from unfurnished rentals falls within the category of property income (revenus fonciers), including where the property is located abroad.
As with furnished rentals, two tax regimes may apply: the micro-foncier regime and the real regime.
🔹 The micro-foncier regime
The micro-foncier regime is a simplified regime based on a standard lump-sum allowance for expenses, without taking into account the expenses actually incurred.
It applies where the annual gross rental income does not exceed €15,000.
Under this regime:
🔸 the taxpayer reports the gross amount of rental income received;
🔸 the tax authorities automatically apply a 30% lump-sum allowance, deemed to cover all expenses;
🔸 the taxable income therefore corresponds to 70% of the gross rental income, regardless of the actual expenses incurred.
This regime is simple from a reporting perspective, but it may be unfavourable where the property generates significant expenses (loan interest, works, insurance, etc.).
🔹 The real regime
The real regime follows a different approach: it allows the determination of the actual net income, taking into account the expenses effectively borne by the property owner.The following expenses may notably be deducted:
🔸 insurance premiums;
🔸 loan interest;
🔸 management fees;
🔸 non-recoverable taxes and charges;
🔸 repair and maintenance works.
Unlike furnished rentals, no depreciation of the property is allowed under the property income regime.
Tax optimisation therefore relies exclusively on the proper deduction of actual expenses.
In return, the real regime requires more detailed reporting and increased care in the classification and substantiation of deductible expenses.
👉 For this reason, recourse to a professional is, in practice, strongly recommended.
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Point of attention
Given the complexity of the applicable rules and their interaction with international tax treaties, it is generally advisable to
seek assistance from a specialist in order to secure the reporting process.
For any question or consultation request,
please do not hesitate to contact me.
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