Buying in France? Here’s What U.S. Homeowners Need to Know About Taxes in the Hexagon

France has long drawn American second-home buyers seeking la belle vie, from its sun-drenched coastlines to its rolling vineyards and chic urban centers. But beyond the aesthetics of a Provençal stone cottage or a Paris pied-à-terre, France’s evolving tax landscape is increasingly catching the attention of those considering full or part-time residency.

In recent years, interest has grown in how France's residency rules and tax treaties could benefit certain individuals, especially retirees or remote workers with international income. But with potential upside comes complexity, making the role of a qualified tax professional essential.

Many Americans are surprised to learn that becoming a French tax resident can sometimes be more favorable than remaining under the U.S. system alone. As noted by financial adviser Rob Kay in a recent Connexion France article, France offers tools for tax optimization, especially for families or those with diverse global assets.

Take, for example, France’s parts familiales system, which spreads taxable income over household members and can substantially lower one’s effective tax rate. For a couple or family with dependents, this can translate into a notably reduced burden compared to single-filer systems.

In addition, France’s double tax treaties (including with the U.S.) help prevent double taxation and allow individuals to structure income streams strategically. This is especially useful for those drawing income from pensions, royalties, or real estate in multiple countries.

While France’s impôt sur la fortune immobilière (real estate wealth tax) may sound intimidating, it applies only to real estate holdings worth more than €1.3 million. Moreover, for new residents, foreign-held properties are exempt from this tax for five years, providing significant relief for those who’ve diversified their wealth internationally.

According to EY’s France wealth tax guide, this exemption can serve as a strategic tool for mid- to high-net-worth families eyeing retirement or succession planning in Europe.

French inheritance taxes, while high on paper, are often mitigated through careful planning. As The Connexion notes, France allows for multiple allowances for multiple allowances between generations, meaning large portions of an estate can pass tax-free with the right structuring. For instance, each child can receive up to €100,000 tax-free from each parent.

For expats or dual nationals, this opens the door for trust strategies, corporate asset structures, or donor-advised funds to be considered in tandem with U.S. requirements. The interplay between French and U.S. inheritance law is intricate, highlighting once again the importance of cross-border tax expertise.

Publications such as Bloomberg and The Guardian have chronicled a post-pandemic surge in U.S. citizens applying for French long-term visas and exploring part-time residency options. In fact, France issued over 10,000 long-stay visas to Americans in 2023 alone.

One such case is Susan Taylor, a retired executive who relocated to Aix-en-Provence in 2022. “I was worried about the French tax system, but my advisor showed me how much of my retirement income could be excluded or favorably taxed,” she told The Local France. “The lifestyle is amazing, and I’m not paying any more in taxes than I did in California—maybe even less.”

Similarly, New York entrepreneur Daniel Schwartz told The Guardian that after moving part-time to Nice, he was surprised by how manageable his tax situation became. “I thought France would be a nightmare for taxes, but with proper planning, I’m keeping more of my earnings than I expected,” he said. “You can’t go into it blindly. You need a tax expert who understands both U.S. and French systems.”

France’s benefits—family quotient rules, international tax treaties, and real estate exemptions—are only accessible if you plan carefully. Without professional help, even well-intentioned retirees can find themselves double taxed or in violation of residency thresholds. As U.S. citizens are taxed on their worldwide income regardless of where they live, coordination between French and American tax rules is crucial.

There’s also the ongoing obligation to file FATCA and FBAR disclosures for Americans holding accounts abroad, a compliance area that many fail to consider when dreaming of croissants and château views.

Buying a second home in France can be about more than lifestyle (though that certainly plays a part for most Americans who are thinking about putting down French roots, even part-time!) It can be part of a strategic financial decision. But understanding tax residency, wealth exemptions, and cross-border compliance isn’t something to DIY. If you're considering a move abroad or simply want to explore the benefits of French tax residency, now is the time to speak with our office.