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3% annual tax

Legal entities owning real estate in France or rights on them have to pay annually before May 16th a tax of 3%, based on the market value of the properties they own at the 1st january.
(art. 990 D to 990 G french tax code)

The tax representative in charge of the capital gain tax is also responsible for the payment of that tax for legal entities whose head office is located out of European Union.

The exemptions

  • There is, however, some exemption cases (art. 990 E Tax Code) for companies whose head office is located in a State with which France has concluded an Agreement (contact us to know if your country is part of that list or not, or see below).

    In this case, the Company has to do a tax return (Form 2746), including :
    • location, description and the real market value of the real estate owned on the 1st January
    • name, address and rights of each partnership/shareholder on the 1st January.

States list – none discrimination clause from the first of january 2012States list – Assistance clause of administration from the first of january 2012
  • Companies whose value of the real estate assets is less than 50% of its total assets
  • Companies quoted on the Stock Exchange
  • States, International Organizations, public Institutions
  • Pension funds and non-profit institutions (if the real estate is necessary to their activity)
  • Estate or rights < € 100,000 or < to 5% of the estate or rights.