77 terms explained simply
Profit made when selling a property. Taxed at 19% + 17.2% social contributions, with progressive allowances based on holding period.
Example: Property bought at €150,000 sold at €200,000 after 10 years: partial exemption thanks to allowances.
Social contributions levied on rental income at a combined rate of 17.2% (French social security contributions).
Example: On €10,000 net rental income: €1,720 in social contributions.
Accounting deduction for the loss of value of the property and furniture over their useful life.
Example: A property worth 200,000 depreciated over 30 years = 6,666/year in deductions.
Single Flat-rate Withholding of 30% (12.8% income tax + 17.2% social contributions) on capital income.
Example: SCI dividends: €5,000 × 30% = €1,500 flat tax.
Non-Professional Furnished Rental. A favorable French tax regime allowing deduction of expenses and property depreciation.
Example: A furnished one-bedroom rented at 800/month with 3% depreciation on the purchase price.
Declarative scheme deducting real expenses and depreciation. Often zero tax for 10 to 15 years.
Example: 12,000 euros rent, 4,000 expenses, 8,000 depreciation, taxable result of zero.
Professional Furnished Landlord. Status when furnished rental income exceeds 23,000 euros per year and 50% of household income.
Example: 30,000 euros of furnished rental income and 60% of household income triggers LMP status.
The tax rate applied to your highest income bracket.
Example: With a 30% marginal rate, each additional euro of rental income is taxed at 30%.
Simplified regime with a 50% flat-rate deduction on furnished rental income.
Example: For 10,000 in rental income, only 5,000 is taxed.
Simplified regime for unfurnished rental with a 30% deduction on rent.
Example: For 10,000 in rental income, only 7,000 is taxed.
When deductible expenses exceed rental income, the deficit can be offset against general income (up to €10,700/year).
Example: €8,000 rent - €20,000 renovation = -€12,000 → €10,700 deducted from taxable income.
Income from unfurnished rentals, taxed at the progressive income tax rate plus social charges.
Example: Rent from an empty 1-bedroom flat at 600 euros per month, reported as property income.
Allows deduction of all actual expenses (works, interest, management fees, depreciation).
Example: Ideal if your expenses exceed 50% of your rental income.
French Civil Real Estate Company. Legal structure for jointly owning property, with the choice between income tax (IR) and corporate tax (IS).
Example: Two partners at 50/50: each declares their share of income and expenses.
Real estate company taxed at personal income tax level. Each partner reports their share as property income.
Example: 50/50 family SCI, each partner reports 5,000 euros out of 10,000 net rental income.
Real estate company taxed at corporate level. Allows depreciation but double taxation on exit.
Example: Profits taxed at 15% up to 42,500 euros then 25%.
CSG, CRDS and solidarity contributions at 17.2% on capital income.
Example: 5,000 euros of property income generates 860 euros in social charges.
Fixed reduction applied to income before tax. 50% under micro-BIC, 30% under micro-foncier.
Example: 10,000 euros of rent under micro-BIC, taxable base of 5,000 euros.
Annual Percentage Rate. Includes interest, insurance and processing fees. Allows comparing loan offers.
Example: Nominal rate 3.5% + insurance 0.3% + fees = APR 4.1%.
Guarantee via a third party (Crédit Logement) replacing the mortgage. Cheaper and partially refunded.
Example: 0.8 to 1% of the loan amount, half refunded at the end.
Maximum borrowable amount based on your income, existing debts and the 35% debt ratio limit.
Example: Income €4,000/month with no debt → borrowing capacity of ~€200,000 over 25 years.
Difference between rental income and all expenses (mortgage, taxes, charges). Positive = you earn money each month.
Example: Rent 800 - Mortgage 600 - Charges 100 = +100 cash flow.
Portion of income allocated to loan repayments. French banks cap this at 35%.
Example: Income €3,000/month, loan payments €1,000/month → 33% debt ratio.
Amount invested without borrowing. Typically 10-20% of purchase price + notary fees.
Example: For a €200,000 property: €30,000 down payment (15%) + €15,000 notary fees.
Interest rate that stays the same for the entire loan term. Constant monthly payment.
Example: 200,000 euros loan over 25 years at 3.5% fixed: 1,001 euros per month.
Ratio between annual rent and purchase price. Does not account for expenses.
Example: (800 x 12) / 150,000 = 6.4% gross
Using the bank's money to invest. Multiplies the return on your down payment.
Example: With a 20,000 down payment, you buy a 200,000 property = leverage of 10.
Mandatory insurance covering death, disability and incapacity on the mortgage.
Example: Average rate 0.25-0.40% of borrowed capital, tax-deductible under LMNP real regime.
Mechanism combining multiple loans into a constant total monthly payment.
Example: Zero-rate loan plus main loan smoothed over 25 years.
Real security on the property: the bank can seize and sell it in case of default.
Example: Setup fees around 1.5% of the loan amount, paid to the notary.
Yield after deducting all expenses and taxes. Reflects your real gain.
Example: A 5% net yield on 200,000 = 10,000/year in real gain.
Contractual option to lower or raise monthly payment (often +/- 30%).
Example: 1,000 euros payment increased to 1,300 to pay off faster.
Return On Investment. Measures profitability relative to the money invested (down payment + fees).
Example: Annual gain 5,000 / Down payment 30,000 = 16.7% ROI.
Rate indexed to a benchmark (Euribor) that fluctuates. Payment or term may change.
Example: 3-month Euribor plus 1% margin, payment adjusted yearly.
Private living area measured under the Carrez law. Excludes surfaces below 1.80m ceiling height and annexes.
Example: A 2-bed flat with 65 m² Carrez may have 72 m² total floor space (low attic excluded).
Lease for business premises. Term of 9 years (3-6-9), strong tenant protection.
Example: Shop rented to a retailer, rent indexed to the commercial rent index.
Legal regime for a building divided into units. Each co-owner pays shared maintenance charges.
Example: Condo charges: elevator, concierge, gardens → €150-300/month.
Energy Performance Certificate. Rates housing from A (efficient) to G (energy sieve). Mandatory for renting.
Example: An F or G rating has prohibited rental since 2025 (French Climate Act).
Score from A (very efficient) to G (energy sieve) based on consumption and emissions.
Example: An F or G rated home can no longer be rented (Climate law).
The property is equipped with furniture necessary for daily living. Favorable tax regime (LMNP).
Example: Bed, table, chairs, appliances... defined by law.
Floor area of enclosed covered rooms, excluding walls, ducts and unfit attics.
Example: A 3-room flat measuring 70 m² of floor may have 65 m² of habitable surface.
Short-term furnished lease (1 to 10 months) for people in transit (students, missions).
Example: Student on a 6-month internship, mobility lease with no deposit.
Rent excluding charges. Rental amount without recoverable charges.
Example: The rent excl. charges is the basis for calculating yield.
Rent including charges. What the tenant actually pays each month.
Example: Rent excl. 700 + Charges 100 = Rent incl. 800
Ratio between housing demand and supply in an area. Higher tension means lower vacancy risk.
Example: Paris, Lyon, Bordeaux = high-tension zones → almost zero vacancy.
Nightly or weekly rental (Airbnb, Booking). High yield but strict local rules.
Example: Studio in Bordeaux rented at 80 euros per night, capped at 120 days per year for primary homes.
Property rented empty. Different tax regime (property income).
Example: Simpler but often less tax-advantageous.
Period without a tenant. On average 1 month per year = 8% vacancy.
Example: 8% on a rent of 800 = 768 average actual rent.
Business Property Tax. Tax for furnished rental operators if revenue exceeds 5,000.
Example: Varies by municipality, often 200-500/year.
Shared building costs (maintenance, lift, caretaker, green areas) split among owners.
Example: Haussmann building with lift: 250 to 350 euros per month for a 3-room flat.
Unpaid Rent Guarantee. Covers unpaid rent and tenant damages.
Example: Generally 2.5-3.5% of annual rent.
Local tax, abolished on primary homes but kept on secondary residences.
Example: Secondary home in Annecy: 1,800 euros per year.
Real estate agency commission for managing the rental (tenant search, receipts, etc.).
Example: Generally 6-8% of rent for full management.
Non-Occupant Owner Insurance. Protects the owner against damages when the property is rented.
Example: Around 100-200/year depending on the area.
Annual tax owed by the owner. Varies by municipality and cadastral value.
Example: Can represent 1 to 2 months of rent depending on the city.
Charges paid by the landlord but billed back to the tenant (water, lift, waste).
Example: Building charges 200 euros per month, 120 recoverable from the tenant.
Household waste collection tax. Recoverable from the tenant.
Example: 180 euros per year, fully billed back to the tenant.
Real estate agency commission for the sale. Paid by the buyer or the seller.
Example: Generally 3-5% of the sale price.
Deed signed before a notary that officially transfers ownership and triggers payment.
Example: Deed signed 3 months after the agreement, keys handed over the same day.
Acquisition fees including taxes and notary remuneration. Around 7-8% for existing properties.
Example: For a 200,000 property: about 15,000 in fees.
Pre-contract binding both parties, except during the 10-day cooling-off period.
Example: Agreement signed in May, deed in July after loan approval.
Clause cancelling the sale if not fulfilled (loan approval, urban planning).
Example: Loan refused within 45 days, the agreement is void and the deposit returned.
Taxes paid at acquisition, mostly collected by departments (5.80%).
Example: 200,000 euros property: about 11,600 euros of transfer taxes.
2021 law gradually banning rental of energy-sieve homes (G in 2025, F in 2028, E in 2034).
Example: G-rated home: cannot be re-rented after 2025.
Tax incentive for buying old properties to renovate in certain mid-sized cities.
Example: Tax reduction up to 21% of the price over 12 years with 25% renovation works.
Public database of all property transactions in France, published by the tax authorities.
Example: Check actual sale prices in your neighbourhood over the last 5 years.
Area where demand strongly exceeds supply. Rent control and specific tax rules apply.
Example: Paris, Bordeaux, Lyon: rent control in force.
Construction Cost Index reflecting new building cost trends. Used for some commercial leases.
Example: ICC Q2 2025 = 2,227 → used as baseline for commercial rent reviews.
Rent Reference Index published quarterly by INSEE. Caps annual rent increases for tenants.
Example: IRL Q3 2025 = 145.47 → max rent increase: +3.2% vs last year.
Average price per square metre in an area. Key indicator for evaluating a property against the local market.
Example: Paris 16th: ~€11,000/m² vs Mulhouse: ~€1,200/m² - comparable gross yield possible.
Right to own a property without using it or receiving its income (reserved to the usufructuary).
Example: Bare ownership purchase at a 30% discount on market price.
Separation between bare ownership and usufruct. Powerful tax and estate planning tool.
Example: Parents transfer bare ownership to children and keep the usufruct.
Parent company holding shares in other entities (SCI, SAS). Optimises tax and succession.
Example: IS holding owning 3 real estate companies, dividends taxed at 5%.
Sale of a property in exchange for a lump sum and an annuity paid until the seller's death.
Example: 50,000 euros lump sum and 800 euros monthly annuity, flat freed at death.
Commercial activity of buying and reselling real estate, subject to VAT and corporate tax.
Example: Buy at 150,000 euros, 30,000 in works, resell at 220,000 within the year.
When rents cover 100% of charges, loan repayments and taxes. Cash flow ≥ €0.
Example: Rent €900 - Loan €650 - Charges €150 - Tax €50 = +€50 → self-financed.
Investment approach focused on long-term asset accumulation rather than immediate cash flow.
Example: Buying in Paris at 3% yield but expecting 20% capital appreciation over 10 years.