Last Updated on 28th May 2025
Researching and understanding how taxes for expats in France will affect your tax obligations is, of course, an important aspect of relocating. However, there are several variances within the French tax system, and taxes that residents are liable to pay that don’t exist in the UK.
Other contrasts apply to the allocation of personal income allowances, and building these factors into your tax planning will ensure you have a comprehensive, accurate budget and aren’t met with any unexpected obligations once you have settled.
In this article, we’re sharing a summary of the main French taxes most expatriate residents will need to account for and highlighting the primary differences to anticipate.
Paying French Income Tax as a Foreign National Resident
At a glance, French income tax looks fairly comparable to the UK system, with progressive income tax rates that increase with the value of your taxable income. One aspect to be mindful of is that if you live mainly in France as a tax resident, you’ll pay French income tax on your worldwide income, whereas non-residents will be liable only on the income arising within France.
One of the biggest contrasts is that income taxes and allowances are calculated based on the income of the household rather than separately for each individual. Households are split into parts, with one person equal to one part, and the first two of any children counted as half of one part each, provided the parents are either married or in a civil partnership.
This can seem complex, but in short, the system works by:
- Dividing the total income by the number of parts
- Using this income to arrive at the applicable income tax band
For example, a household with two parents and one child comprises 2.5 parts. This system means that larger households tend to have a relatively smaller tax liability.
Another difference is that all residents must submit a tax return, regardless of whether they pay tax through the Prélèvement à la Source system, equivalent to PAYE in the UK.
French Income Tax Bands for 2025
The current tax bands and rates payable, before allowances and reliefs or exemptions, are as follows:
Social Charge Contributions Against French Income
Expats living in France should include social charges within their tax calculations, a payment similar to National Insurance Contributions that is used to contribute to the social security system and finance pensions, benefits and healthcare.
In some instances, social charges can even be higher than the income tax payable. Depending on the specific circumstances of each taxpayer, they can amount to 9.7% on employment income, 9.1% on pension earnings, or 7.4% for individuals with a low income, and 17.2% on interest, rental incomes, and capital gains.
Note that only residents opted into or eligible for the French healthcare system need to pay social charges on their pension income, which excludes UK citizens with an S1 form. Investment income social charges reduce to 7.5% for residents either covered by another country’s health system or who relocated to France from the UK with an S1 form prior to Brexit.
Capital Gains Taxes in France for Expatriates
Capital gains tax is called plus-value in France and applies to profits or gains made from investment assets and when selling a property. In the latter case, the plus-value depends on whether the taxpayer has owned the property for a significant period since a tax exemption applies after 22 years and social charge exemptions from 30 years.
Other capital gains made on the transfer or sale of stocks and other financial assets can either be taxed according to the income tax bands or taxed at a flat rate called the Prélèvement Forfaitaire Unique, which comprises both social charges and capital gains tax at 31.8% less a 40% deduction on the gain.
The Wealth Tax System in France
France’s wealth tax, or Impôt sur la Fortune Immobilière (IFI), applies to those with property ownership worth more than €1.3 million net. It replaces the previous ISF tax, and other assets are excluded.
Tax residents pay French wealth tax based on their worldwide property ownership, whereas residents are only liable if their real estate within France exceeds the threshold.
Wealth tax rates are progressive, starting at 0.5% and extending up to 1.5% for those with property assets in the highest brackets.
Property Tax Obligations for Expatriates Living in France
Aside from the potential wealth tax liability, French property owners need to account for two separate property taxes:
- The Taxe Foncière applies to all owners and is calculated against the nominal rental value of the home and the land it sits on. Similar to UK council tax, it is used to pay for infrastructure and local services.
- Taxe d’Habitation has been subject to reforms and now primarily applies to second homeowners with a comparable calculation basis for additional properties outside of a main residential home.
The exact value of property tax depends on the region since the local municipalities have autonomy over the rates they set, but it remains important to calculate the annual obligation and include this within your tax planning.
How to Ensure You Have Correctly Budgeted for Your Tax Obligations in France
We’ve covered the most prevalent taxes and the main differences to expect from the UK tax system, but the ideal approach is always to take a cohesive, personalised view of your assets, circumstances, income sources and budgets to ensure you have a strategic wealth management plan that accounts for all taxation.
Should you have queries about any of the tax categories mentioned in this guide, be keen to understand in greater detail the liabilities you will need to budget for or be interested in sourcing expert advice to help you create a highly tax-efficient plan, you are welcome to contact your nearest Chase Buchanan Wealth Management team.
You may also be interested in accessing our earlier, more detailed downloadable Expats Guide to Taxes in France, which is readily available through the Chase Buchanan website.
All investments carry risk, including the potential loss of capital. You should carefully consider whether investing is suitable for you, taking into account your personal circumstances, financial situation, and risk tolerance.
*Information correct as at June 2025
