Five ways the latest 2025 budget will impact property owners in France

France’s 2025 budget introduces changes that will impact the finances of many existing homeowners in France, as well as those looking to purchase a property.

From increased notaire fees to taxation on capital gains, we take a look at five of the main changes as summarised by le Figaro.

Read also: French budget is forced through parliament: how could it impact your finances

Temporary tax exemption from property gifts

The budget introduces a gifts tax exemption on gifts of funds for property-related investments up to a maximum of €100,000 per donor and €300,000 per beneficiary, until December 31, 2026. 

It will only be possible for certain close family members (including parents or grandparents donating to children/grandchildren/great grandchildren or in certain cases where uncles or aunts donate to nephews or nieces).

To be eligible for the tax incentive, the investment must be made within six months in one of the following:

• A new-build (or in construction) residential property that will be the recipient’s (or their unrelated tenant’s) main home for at least five years

• Environmental renovations in a non new-build residential property that the recipient owns and will occupy as a main home for at least five years

Note: the exemption is cumulative with the standard allowance of €100,000 per parent, renewable every 15 years. Each beneficiary can therefore receive a total of €500,000 tax-free if receiving the full allowance from both parents. 

Read also: What gift tax is liable on property in France for UK residents?

Expansion of the zero-interest loan

Article 90 outlines that first-time buyers will benefit from the zero-interest property loan (PTZ) for financing a new-build home anywhere in France.

Previously, this was only possible in certain areas facing a housing shortage and only for flats.

Increasing notaire fees

Article 116 states that from April 1, departmental authorities can increase their part of notaire fees (droits de mutation à titre onéreux) on a property purchase from 4.5% to 5%.

However, they will be able to exempt first-time buyers, provided the property is their main home.

Paris has already confirmed it will implement the fees, with more departments expected to follow.

Read more: Buying a property in France may cost more from April as ‘notaire fees’ allowed to rise

Increasing taxation on capital gains

Tax advantages for non-professional letters of furnished accommodation (loueurs en meublé non professionnel or LMNP) will be reduced. 

Non-professional renters include those who rent out fully-furnished properties without offering typical hotel services such as providing breakfast, completing regular housecleaning, or having a guest reception.

Depreciation (amortissement fiscal) of the property claimed over the years will be taken into account when calculating the capital gains tax during a sale. This effectively increases the realised taxable gain on a property on sale. 

Exceptions apply to certain accommodation, such as student residences and elderly care homes. 

Owners will still generally be exempt from paying the capital gains tax if they have owned the property for more than 22 years.

Loc' Avantages extension

Article 88 outlines that the Loc'Avantages tax reduction will be in place for a further three years, until the end of 2027.

This scheme allows landlords to benefit from a tax reduction if offering a property for rent.

This tax reduction is calculated on the rent price: the lower the rent, the higher the tax reduction.

There are a number of conditions for properties to be deemed eligible, including but not limited to:

• The rent must be lower than the expected market price

• The property must be the renter’s main home

• The property must be unfurnished. 

The full list of conditions can be found on the French government website here.