France 2026 Budget: Tax & Property Changes Explained

Following months of political stalemate, the French Parliament approved the 2026 Finance Bill on Monday, 2 February, initiating a series of measures that will change the property landscape across France.

These measures include changes to cadastral values, a new status for private landlords, and an expansion of vacant housing taxes in 2027. This legislation is more than mere fiscal adjustments; it represents a strategic shift in how property is taxed, managed and utilised in France.

Whether you’re a landlord, homeowner, or international buyer, these reforms warrant careful consideration, not just for compliance but as potential opportunities.

Cadastral Values

Cadastral value is an official, administrative valuation of a property determined by the government for tax purposes. It does not reflect the property’s market value. Instead, it is used to calculate local property-related taxes, including:

• property tax (taxe foncière)
• second-home surcharge
• household waste collection tax (taxe d’enlèvement des ordures ménagères)

A full update of cadastral rental values was initially scheduled for 2026. However, the 2026 Financial Bill postpones all deadlines for revising cadastral valuations of residential premises and premises used for salaried home-working activities by 3 years.

As a result, the outcomes of the revision will be incorporated into the 2031 tax bases (rather than 2028), with the new rental values determined as of 1 January 2028 (instead of 1 January 2025).

Private Landlord Status 

The “private landlord” status has now been introduced. Its purpose is to encourage investment in buy-to-let properties, whether newly built or renovated, that meet high energy-efficiency standards. This aims to address the housing shortage and promote rental investment.

The “private landlord” status is available to individuals acquiring eligible real estate between 3 February 2026 and 31 December 2028.

Eligible landlords may amortise qualifying properties for French income tax purposes over a minimum period of 9-12 years. In practice, this allows taxpayers to deduct a portion of the property’s value from their taxable rental income each year, as follows:

• Newly built properties: between 3.5% and 5.5% per year.
• Renovated properties: between 3% and 4% per year.

These rates apply to up to 80% of the property’s value, subject to an annual deduction cap of €8,000 per property and a limit of 2 properties per taxpayer. This cap is increased by €2,000 or €4,000 if at least 50% of the gross rental income from the amortised properties comes from social or very social rental housing.

The landlord must commit to renting out the property unfurnished as a primary residence for a period of 9 years. The rental must commence within 12 months of the building’s completion or, if later, its purchase. Additionally, rental income must comply with rent caps set at approximately 15% below market rates.

Vacant Housing Taxes to be Merged from 2027

The 2026 Finance Bill introduces a new tax on vacant residential properties, replacing the current annual tax and council tax on vacant dwellings, starting in 2027. The annual tax on vacant dwellings was automatically applied in communes with a significant imbalance between housing supply and demand.

In contrast, the tax on vacant dwellings was imposed according to a municipal decision targeting properties vacant for more than 2 years, but only in municipalities where the annual tax did not apply.

The new tax on vacant residential premises is payable on dwellings that are vacant on 1 January of the tax year, provided they have been unoccupied for at least:

• 1 year where the dwelling is located in a zone tendue (i.e., a municipality with a significant imbalance between housing supply and demand, resulting in serious difficulties in accessing housing across the existing residential stock)
• 2 years where the dwelling is located outside these zones.

The tax base is the property’s cadastral value. For vacant dwellings located in zones tendues, the tax rate is:

• Between 17% and 30% in the first year of taxation
• Between 34% and 60% from the second year onwards.

For vacant dwellings located outside zones tendues, the tax on vacant residential premises is optional. The maximum rate is 50%.

The Jeanbrun Scheme

The Jeanbrun scheme, introduced in the 2026 Finance Act under Housing Minister Vincent Jeanbrun, is a fiscal reform aimed at boosting rental investment in France. 

The scheme has been designed to encourage private investors to rent out properties at regulated rates in the intermediate and social categories, replacing the Pinel tax reduction with deductions for part of the purchase price from rental income.

Caps are €12,000 for very social, €10,000 for social, and €8,000 for intermediate rentals. Eligible properties include new builds and older properties requiring at least 30% renovation.

Real Estate Wealth tax (REWT)

Parliamentarians considered replacing the Real Estate Wealth Tax (REWT) with a broader “tax on unproductive wealth” that would expand the tax base beyond real estate to include assets such as yachts, art, cash, and digital assets. However, this proposal did not make it into the final budget presented. The REWT, therefore, remains unchanged.

For Expert Legal and Tax Advice

Our legal specialist, François Mouniélou, and his team focus on taxation, wealth tax, inheritance, and succession. Feel free to reach out to him for more details or to schedule a consultation.

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