VAT & Real Estate

Real Estate VAT and Tax Representative for Foreigners in France

Property development, foreign SCI, non-resident property dealer: master the VAT obligations related to French real estate and the role of the accredited tax representative.

Principles of French real estate VAT

Real estate VAT is a specific VAT regime that applies to certain transactions involving real property in France. It is governed by Articles 257 to 261 of the French General Tax Code (CGI). Contrary to a common misconception, not all real estate transactions are subject to VAT: only those carried out by taxable persons acting as such fall within its scope.

For a foreigner — whether an individual or a company — carrying out a real estate activity in France, the stakes are significant. The standard rate of real estate VAT is 20%, with reduced rates for certain social housing transactions. Taxable transactions require VAT registration, and if the operator is established outside the European Union, the obligation to appoint an accredited tax representative applies in addition.

VAT vs. capital gains tax Real estate VAT and capital gains taxation are two separate levies. A foreigner selling a property may be simultaneously subject to VAT (if a taxable person) and to the withholding tax on capital gains (Article 244 bis A CGI). The accredited tax representative manages both obligations.

Which transactions are subject to real estate VAT?

The main real estate transactions subject to VAT in France are:

  • Sales of new buildings (less than 5 years after completion) by a taxable person: VAT mandatory at 20%.
  • Sales of existing buildings by a taxable person on option: it is possible to opt for VAT in order to recover VAT on works.
  • Property dealing activity: buy-to-sell property transactions for profit, subject to VAT on the margin or on the total price depending on the case.
  • Commercial lettings subject to option: the VAT-registered landlord may opt for VAT on rents for commercial premises.
  • Construction works carried out by non-residents: construction, renovation or rehabilitation works are services located in France subject to French VAT.
TransactionVAT applicableRate
Sale of new building (less than 5 years)Yes, mandatory20%
Sale of existing building (taxable person)On option20%
Unfurnished residential lettingExempt—
Commercial letting (on option)On option20%
Construction / renovation worksYes20% (or reduced rate)

Foreign SCI and VAT obligations in France

Foreign property holding companies (SCI) or any non-resident legal entity owning real estate in France may be affected by real estate VAT in several situations:

  • If the SCI opts for corporate tax and carries out a taxable letting activity
  • If it carries out works and recovers VAT on capital expenditure
  • If it sells a property falling within the scope of VAT

An SCI established outside the EU that carries out taxable transactions must necessarily register for VAT in France and appoint an accredited tax representative. This representative will be jointly and severally liable for the payment of VAT and will handle the periodic returns with the Foreign Business Tax Office (SIEE).

Practical example A Luxembourg holding company buys a building in Paris to renovate and resell. It carries out works of €500,000 (net of VAT) with €100,000 of recoverable VAT. To recover this VAT, it must be registered in France. Being established in the EU (Luxembourg), it is not required to appoint a tax representative under Article 289 A, but may choose to do so for compliance security. If it were an American company, a tax representative would be mandatory.

Role of the tax representative in taxable real estate transactions

For a non-EU company carrying out real estate transactions subject to VAT in France, the accredited tax representative plays a central role:

  • Obtains VAT registration with the SIEE (Foreign Business Tax Office)
  • Prepares and files VAT returns (monthly or quarterly CA3)
  • Manages VAT credit refund requests
  • Coordinates with the notary for real estate sales subject to VAT
  • Is jointly and severally liable for the payment of VAT, which means requiring sufficient bank guarantee
Risk of transaction being blocked A French notary cannot formalise the sale of a new building by a non-EU non-resident taxable person if that person does not have a duly accredited tax representative. The absence of a representative can completely block the transaction.

Consult our list of DGFiP-accredited tax representatives to identify a professional specialising in real estate transactions for non-residents.

Frequently asked questions

Yes, if the seller acts as a taxable person (property developer, property dealer, SCI subject to VAT), the sale of a new property is subject to real estate VAT at 20%. If established outside the EU, they must appoint an accredited tax representative for this transaction.
It depends on its activity. An SCI that lets property unfurnished (bare rental) is not subject to VAT. However, if it opts for VAT on rents, carries out works, or sells a property as a taxable person, VAT obligations may arise. Consulting a tax representative is recommended to analyse the specific situation.
Real estate VAT (19.6% or 20%) applies to transactions carried out by taxable persons (sales of new buildings, certain lettings). The annual 3% tax on the market value of buildings held by legal entities is a separate tax, from which foreign entities may be exempt under certain conditions (tax treaty, IFU 2746 declaration).
Yes, if established outside the EU (or outside countries linked to France by a mutual assistance agreement), they are required to appoint an accredited tax representative when carrying out VAT-taxable transactions in France, including buy-to-sell property transactions subject to VAT.
In principle, furnished letting is VAT-exempt. However, it may become subject to VAT if the landlord also provides para-hotel services (reception, regular cleaning, household linen, breakfast). In that case, the non-EU non-resident should consider registering for VAT and appointing a tax representative.
Official sources: impots.gouv.fr — BOFiP — Real Estate VAT — CGI Art. 257 to 261

Do you need an accredited tax representative ?

Browse our list of tax representatives accredited by the French Tax Authority (DGFiP). Compare specialities, get a quote and secure your tax obligations in France.

View the list 2026 How to choose wisely?