Expat tax treaty: how to avoid double taxation on your French property income

You live abroad, you rent out (or want to rent out) a property in France, and one question keeps coming back: “Will I pay tax twice, once in France and once in my country of residence?” Many expats panic at the idea. This is precisely the problem the tax treaty is meant to solve.

Before investing, I was a lawyer: reading a law text or a tax treaty was my job. Since then, I have built my wealth in France while living abroad, and with my team we have supported more than 1,000 French people in more than 60 countries. This guide does not deal with the tax treaty “in general”: it deals with your case, that of the owner of a rental property in France. Becauseinvesting in France as an expat, it is not only finding a property and a bank: it is also knowing who has the right to tax you, and how much.

Double taxation: the real problem of an expat who rents out in France

A worked example: rent taxed in France and in the country of residence

Let’s take an educational example (this is not a client file): you live outside Europe and your unfurnished rental generates €12,000 of net taxable income per year.

On the French side, you pay income tax at the 20% minimum rate (up to €29,579 of 2025 income, 30% above, unless your worldwide average rate is more favourable), i.e. €2,400, plus 17.2% social contributions, i.e. €2,064. Total France: 4 464 €. On the country-of-residence side, suppose your worldwide income is taxed there at 30%: €3,600 more.

The treatment of social contributions in the tax credit varies by country.

Why the absence of a treaty costs thousands of euros

Without a treaty, each country applies its domestic law without caring about the other. In the example, the gap amounts to €2,400 to €3,600 per year, on a single property. And without a text to decide, France can go further: consider you a French tax resident on the basis of a body of indicators, including your nationality.

The good news: France has signed more than 120 tax treaties, it is one of the most covered countries in the world. I have studied those of most countries where our members live, and there is one each time. You can check in two minutes on the official list of tax treaties concluded by France. But the existence of a treaty is not enough: you still need to know what it says.

What is a bilateral tax treaty?

The principle: allocating the right to tax between two states

A tax treaty is an agreement between two countries that sets, income by income, who has the right to tax what. Most follow the OECD model, which makes them fairly similar to one another (even if differences in detail can be costly). For real estate, the rule is unusually stable.

“In real estate, in 99% of the countries in the world, it is the location of the property that determines taxation. You invest in France: so it is France that sets the tax rules for your property. The treaty then comes afterwards to say how double taxation is eliminated.” Frédéric Moreau, founder of ImmoPourExpat

Connecting factors: home, stay, nationality

Before allocating the tax, the treaty answers a preliminary question: which country are you resident of? Under French law, three alternative criteria are enough to make you a tax resident: your home or main place of stay in France, your main professional activity in France, or the centre of your economic interests in France. One is enough.

Typical example: you live in Morocco, Morocco considers you a Moroccan resident, and France considers you a French resident. There is a conflict of residence. The treaty then decides with a series of criteria applied in order: the permanent home, then the centre of vital interests, then the habitual abode, then nationality. And residence within the meaning of the treaty prevails over French domestic law, a primacy written in black and white in the CGI since the 2025 Finance Act.

For an investor, this point is anything but theoretical. The more your French assets grow, the more your income comes from France, and the closer the “centre of economic interests” criterion gets. The treaty is what protects you, provided it retains domicile as the main criterion. They are not all equal: I find, for example, the France-UAE treaty rather light on protecting residence.

“The first purpose of a tax treaty is to determine your tax residence, in order then to eliminate double taxation. If you do not check this criterion, generally at the very start of the text, everything else rests on sand.” Frédéric Moreau

What treaties cover (and do not cover)

A treaty covers income tax, corporate tax, capital gains, and often wealth tax. It covers neither property tax, nor VAT, nor social security contributions. Inheritances and gifts fall under separate, far less numerous treaties. A last point often misunderstood: a treaty never creates a benefit that does not exist in domestic law. It allocates, it offers nothing.

The two mechanisms to eliminate double taxation

Tax credit method: how it is really calculated

Your country of residence taxes your worldwide income, French rents included, then deducts the tax already paid in France. This deduction is capped: it cannot exceed the local tax corresponding to those same rents. Result: overall, you pay the higher of the two rates, never the sum of the two.

Exemption method: when it applies

Your country of residence does not tax your French rents, but takes them into account to calculate the rate applicable to your other income (this is the “effective rate” rule, or progression proviso). Result: only French taxation weighs on your rents, with a slight rise in the rate on the rest. This is generally the method most favourable to the investor.

How to know which one applies to your country of residence

Two articles are enough. The one on income from real estate (article 6 in recent treaties, article 3 in older ones such as those with Belgium or Germany) confirms taxation in France. The one on the elimination of double taxation (between articles 19 and 25 depending on the text) specifies the method adopted by your country.

With ImmoPourExpat, we have supported more than 1,000 non-resident French people in finding their property, financing it, but also optimising the tax treatment of their investment. Checking what your country’s treaty provides is part of the job: this is what is covered by our tax expertise for expats.

Real estate income: what treaties say

Property income: taxation in the country where the property is located

Unfurnished rental (property income) or furnished rental (BIC): in both cases, this is income from property located in France, therefore taxable in France. You pay tax there at the 20% or 30% minimum rate, plus the social contributions : 17.2% for unfurnished rental, 18.6% for furnished since 2026, or only 7.5% if you are affiliated to a social security scheme in the EU, the EEA, Switzerland or the United Kingdom. The calculation detail is in my guide on thetaxation of a non-resident’s rental income.

These rates apply to your taxable result, not to your gross rents. And this is where the choice of regime changes everything.

“In France, it is perfectly possible to pay no tax on your rental income if you choose the right tax regime and structure your investment well. I paid none for about seven years. But that presupposes mastering the rules, not discovering them at your first return.” Frédéric Moreau

Capital gains on property: treaty rules

Same logic on resale: the capital gain on a property located in France is taxable in France (19% tax, plus social contributions, with allowances for length of ownership). Your country of residence may also tax it, then eliminate the duplication according to its method. I detail the calculation in the guide on capital gains tax on property.

Special case of SCIs and holding through a company

This is the most technical trap. An SCI subject to corporate tax is taxed in France at company level. But if your country of residence considers it a “transparent” vehicle, it taxes you, personally, on income that stayed in the company and that you never received. Two taxes, on two different taxpayers, which the treaty eliminates poorly. Another example: on the Swiss side, the exemption of income from French property company shares is granted only after proof of their taxation in France.

The structure is therefore decided before the purchase, and even before the first bank meeting, because it also conditions how to finance your property project in France : a bank does not process a mortgage for non-residents in the same way in a personal name as in a company.

The treaties most relevant for French expats

Table of the main countries of residence (credit vs exemption)

The method must always be checked in the text applicable to your situation, and in your country’s domestic rules.

Switzerland is one of the countries where the treaty works to the full. Here is the experience of a member living there, who invested in two properties.

No-treaty case: domestic law applies

If your country has no treaty with France, France taxes your rents under its rules, and your country of residence does the same under its own. Some states grant a unilateral tax credit, others do not. In that case, be cautious: the project is built starting with taxation, not with the property.

Calculating your tax credit: step-by-step method

Step 1: determine the taxable income in France

Calculate your net result under French rules (micro or actual, unfurnished or furnished), then the corresponding French tax: income tax on one side, social contributions on the other.

Step 2: determine the tax in the country of residence

Your country recalculates the income under its own rules: allowable expenses and depreciation are not necessarily the same as in France. It deduces the local tax corresponding to those rents.

Step 3: apply the tax credit cap

The credit equals the smaller of the two amounts: the tax paid in France, or the local tax on that same income.

Full example: two countries, two results

Educational example: €10,000 of net income, €2,000 of income tax in France (20% minimum rate).

In country A, you top up to the local rate. In country B, €500 of credit remains unused (lost or carried forward depending on the country). And beware of the reverse effect: if your French result falls to zero thanks to LMNP depreciation, your tax credit falls to zero too. A tax-credit country that does not recognise depreciation will then tax you in full. In an exemption country, by contrast, your French optimisation is fully preserved.

Want to know what this gives for your country of residence? This example is deliberately simplified. To find out which method and which tax credit apply to your situation, request a personalised analysis. Request my free analysis

The 4 mistakes that lose you the benefit of the treaty

1. Believing that “treaty” means “nothing to declare”. Your rents are declared in France every year, and almost always in your country of residence too, even if they are exempt there. A double declaration is not double taxation: it is what makes it possible to avoid it. For the French part, our members can rely on Amarris, our partner accounting firm.

2. Confusing exemption and tax credit. In a credit country, you may have a top-up to pay locally, and the cap may make you lose part of the credit. In an exemption country, your rents still raise your rate.

3. Optimising in France without looking at your country of residence. This is the mistake I see most, including among professionals who only master French taxation: LMNP at zero tax in France but taxed locally, an SCI subject to corporate tax seen as transparent.

“France is not enough. The tax treaty is not enough. Your country of residence is not enough. These are three elements you have to look at at the same time. Otherwise, you get trapped, by France or by your country of residence.” Frédéric Moreau

4. Having a fragile tax residence. The treaty protects only genuine residents of the other state. A fixed home (rented or bought, not Airbnbs one after another), a tax residence certificate, a consistent residence permit, a consulate registration: these are the proofs that cover you. Without them, France can requalify you as a French tax resident and tax you retroactively over several years.

“You can make a superb investment, obtain superb financing, have a superb renovation team: if you do not master taxation, sooner or later you pay the consequences, and they are generally very heavy.” Frédéric Moreau

That is why, at ImmoPourExpat, taxation is handled on the same level as the property search and financing, not as an afterthought. We work with non-resident tax specialists who can also support you, from choosing the structure before the purchase through to the return.

FAQ: tax treaty and real estate income

What happens if there is no treaty with my country?

Each country applies its domestic law. France taxes your French-source rents, and your country of residence may tax them a second time, unless it provides a unilateral tax credit. This is a rare situation (France has signed more than 120 treaties), but it requires validating the taxation before buying.

Does the treaty cover CSG and social contributions?

It does not remove them: France keeps the right to tax your rents, social contributions included. The 7.5% reduced rate does not come from the tax treaty, but from your affiliation to a European, Swiss or British social security scheme. On the other hand, France considers CSG and CRDS as taxes covered by its treaties : the United States, for example, accepts crediting them against US tax since 2019. Conversely, the treaty with the United Kingdom expressly excludes CSG and CRDS from the British tax credit. Elsewhere, the answer depends on your country.

Do you have to declare your French income in your country of residence?

Yes, in the vast majority of cases. In a tax credit country, it is the return that allows the credit to be calculated. In an exemption country, it serves to set your effective rate. Only countries with no personal income tax, such as the Emirates, are an exception.

Ready to secure your taxes before investing? Your tax treaty can save you thousands of euros, or cost you if it is misapplied. We have supported more than 1,000 French people in more than 60 countries: let’s check your situation together, country of residence included. Book a meeting with an expert