French 3% Tax on Real Estate (TVVI): What Changes From 2027 for Foreign Entities
- 12 août
- 9 min de lecture
If your company, trust or foundation owns French real estate, directly or through a chain of entities, you have probably met France's annual 3% tax on the market value of property: the taxe sur la valeur vénale des immeubles (TVVI), often called simply the taxe de 3%. Most well-advised structures never pay it, because exemptions are wide. What has changed is how you keep those exemptions.
On 26 June 2026, France published Law no. 2026-534 of 25 June 2026 on the fight against social and tax fraud. Its Article 102 rewrites the disclosure-based TVVI exemption and creates a new French-representative duty. The first practical deadline is the 2027 filing campaign: situation as at 1 January 2027, declaration due by 15 May 2027. Every foreign structure holding French property should review its position now.
FrenchNotaires matches you free of charge with vetted bilingual notaires, typically within about 48 hours, in person (for example near Nice or Paris) or by video call.
What the French 3% tax is
The TVVI is an annual tax equal to 3% of the market value of French real estate (or real property rights such as usufruct) held on 1 January by any legal entity, French or foreign, with or without legal personality: companies, partnerships, trusts, foundations, fiducies and comparable institutions. The legal base is Articles 990 D to 990 G of the French Tax Code (Code général des impôts, CGI).
At 3% of gross market value, with no deduction for mortgages or other debts, the tax is deliberately punitive. Created in 1983, it is an anti-avoidance tool designed to force disclosure of the ultimate owners behind opaque structures. Article 990 G also confirms that the tax is not deductible for income tax or corporation tax purposes.
Where several companies sit between the ultimate owners and the French title, Article 990 F looks through the chain: the tax is due by the entity (or entities) closest to the immovable asset that are not exempt under the disclosure routes, and interposed entities are jointly and severally liable for payment.
For related non-resident ownership costs, see French Property Holding Costs for Non-Residents and French Property Wealth Tax (IFI) for Non-Residents.
How exemptions worked before the reform
Most legitimate holdings escape the tax. Broadly, Article 990 E covers two families of relief.
Exemptions that usually need no 2746-SD
states, international organisations and entities they control;
entities that are not property-rich in France (French real-estate assets below 50% of their French assets, with professional-use carve-outs in the statute);
listed companies whose shares are regularly traded on a regulated market (and certain wholly owned subsidiaries);
eligible entities whose French holding is below €100,000 or below 5% of the property's market value, assessed property by property;
pension institutions and certain public-interest or non-profit bodies;
regulated vehicles such as FPI and SPPICAV, and foreign equivalents meeting the statutory tests.
Disclosure-based exemptions (where the reform bites)
Entities established in France, in the EU, or in a country with an appropriate administrative-assistance or equal-treatment treaty with France can claim exemption by disclosing their French property and their owners. Two routes matter:
Article 990 E, 3°, d): full exemption if the required information is disclosed each year (historically also via a standing commitment);
Article 990 E, 3°, e): exemption only in proportion to shares whose holders' identity and address are disclosed on form 2746-SD.
A treaty or EU seat opens the door. The annual filing is what locks the exemption in place.
Annual declaration or standing commitment
Until the reform, an eligible entity could obtain full exemption under Article 990 E, 3°, d) either by:
filing form 2746-SD (CERFA no. 11109) every year by 15 May, disclosing the location, description and value of its French property and the identity of members holding more than 1%; or
signing a one-off commitment (engagement de communiquer) to provide that same information only if and when the tax authorities asked for it, typically within two months of acquiring the property or participation.
The commitment route was popular with foreign structures precisely because it involved no annual filing: sign once, then wait. Many entities have relied on it for years, sometimes decades, without ever hearing from the French tax administration.
Under current administration guidance, entities that already file a French return containing the same information (notably forms 2072 for many SCIs, or 2038 in timeshare-type cases) are dispensed from a separate 2746-SD. Official doctrine on the commitment route still appears in BOFiP series BOI-PAT-TPC; treat those pages as historical until DGFiP publishes reform commentary.
What Article 102 changes from 2027
The parliamentary purpose, reflected in the exposé des motifs, is clearer ownership transparency and simpler control of the tax. Article 102 of Law no. 2026-534 makes two structural changes that first bite the 2027 declaration campaign:
Topic | Until 2026 practice | From 2027 |
Full disclosure exemption (art. 990 E, 3°, d) | Annual 2746-SD or standing commitment | Annual declaration only; commitment abolished |
French contact point | Tax office could invite appointment within 90 days (BOI-PAT-TPC-30, § 100) | Entities without a French permanent establishment must designate a representative in the declaration (new CGI art. 990 FA) |
Who must file | Taxable entities and those claiming d) / e) relief | Same logic reinforced: filing becomes the only path where the commitment once stood |
Tax rate | 3% of gross market value | Unchanged at 3% |
1. The commitment option is abolished
From 2027, the only way to secure the full disclosure-based exemption that previously rested on an engagement is to file the annual declaration by 15 May. A standing promise to answer future requests will no longer protect you. Entities currently relying on an old commitment must switch to active annual filing. Silence means the 3% tax becomes due.
Past years covered by a valid commitment are not rewritten solely by the reform. The risk sits in 2027 and beyond.
2. A French representative becomes systematic
New Article 990 FA CGI requires entities subject to the TVVI filing duties that have no permanent establishment in France to designate, in the declaration, a natural person tax-domiciled in France or a legal person with its seat in France, authorised to receive all procedural documents relating to control of the tax.
If no designation is made, the entity closest to the immovable assets in the ownership chain known to the administration is deemed authorised to receive those documents, whether or not it is itself exempt. That default often lands on a French SCI beneath a foreign parent.
Read the practical guides next: Form 2746-SD: The Complete Guide and why foreign entities need a representative in France from 2027.
Who is affected in practice
foreign companies (UK Ltd, US LLC or Inc., Gibraltar, BVI, Swiss, Luxembourg or Monaco structures) holding French property directly;
foreign entities holding shares in a French SCI or other property company;
trusts, foundations and comparable institutions holding French real estate;
any structure that signed a disclosure commitment years ago and has filed nothing since (this is the highest-risk group).
French SCIs whose partners are all individuals and which file their annual 2072 return correctly have often stayed outside the 2746-SD workflow under current administration guidance. Two caveats remain:
the 2026 law does not expressly restate that practice; confirm continuity once BOFiP is updated;
any foreign corporate layer above the SCI needs its own analysis and often its own filing and representative designation.
If you are structuring or reviewing an SCI purchase, see Buying a French Property Through an SCI and SCI in France: Advantages and Disadvantages for Foreigners.
What happens if you do nothing
The primary sanction is the tax itself: 3% of the gross market value of the property, every year, with no deduction for loans, plus late-payment interest (CGI Article 1727) and specific late-filing majorations (CGI Article 1728). On a €2,000,000 villa, that is €60,000 per year before interest and penalties.
Failure to declare can also open the door to taxation d'office under the Book of Tax Procedures (LPF Articles L. 66 and L. 67), after a formal notice. Under current BOFiP practice (BOI-PAT-TPC-30), entities that should have disclosed under Article 990 E, 3°, d) or e) and receive a first formal notice generally have 30 days to regularise. If they do so on that first occasion, payment of the tax is often not pursued for non-prescribed years, with an important nuance: on the prorata route under e), tax remains due on any rights whose holders are still not identified. The tolerance applies only once.
The same 2026 anti-fraud law also strengthens broader audit and recovery tools. The probability of a missed filing going unnoticed is falling, not rising. Recent case law from Nice, Grasse and Aix-en-Provence already showed courts applying the disclosure conditions strictly even before the reform.
Map the ownership chain before the 2027 filing season
A bilingual notaire who already handles SCI and cross-border property files can help you identify which entities sit in the French chain and what paperwork third parties will expect.
What to do before the 2027 season
Map your structure: identify every entity between the ultimate owners and the French title.
Check your current exemption basis: if it rests on an old commitment, plan the switch to annual 2746-SD filing.
Prepare shareholder information: identity and address of members holding more than 1%.
Obtain electronic filing access early: many foreign entities need a SIREN, a professional space on impots.gouv.fr and activation of the TVVI teleprocedure; trusts and offshore funds often underestimate how long that takes.
Appoint your French representative: entities without a French permanent establishment will need one on the declaration itself.
Diarise 15 May 2027: from then, the deadline is non-negotiable every year.
As of August 2026, BOFiP has not yet confirmed every practical modality (including the exact electronic fields for Article 990 FA). Build a conservative plan and adjust when doctrine appears.
SCI owned by individuals vs foreign corporate layers
Many British, Irish and American families hold a French holiday home through an SCI whose partners are natural persons. That pattern remains common and often manageable when partners meet French reporting duties. Problems escalate when a UK Ltd, US LLC, offshore company or trust sits above the SCI or owns the property directly.
Before you create, transfer or refinance an SCI interest, ask your notaire to stress-test the TVVI position for every interposed entity. Useful companions: Creating an SCI in France, SCI Share Transfer in France and Buying Commercial Property in France Through a Company.
How your notaire fits (and what they do not replace)
Your French notaire is the public officer who authenticates property deeds, SCI bylaws and many ownership transfers. On TVVI compliance they typically:
document how French property sits in the chain (title searches, SCI share registers, deed history);
flag when a foreign corporate partner or trust layer creates annual filing risk;
coordinate with your tax adviser on valuations and disclosures.
They do not automatically replace a tax filing agent or the new TVVI representative under Article 990 FA. That designation is separate from the better-known capital-gains fiscal representative used when non-residents sell French property (Article 244 bis A). For sale-side rules, see French Fiscal Representative for Non-Resident Property Sellers.
Frequently asked questions
Is the 3% tax rate changing?
No. The rate remains 3% of gross market value. Only the exemption procedure and the representative obligation change.
When do the new rules apply?
For the first time in the 2027 filing campaign, reporting the situation as at 1 January 2027, with filing due by 15 May 2027. The 2026 season remains governed by the pre-reform rules.
My entity signed a commitment years ago. Am I still protected?
Only until the reform bites the 2027 campaign. From then, exemption requires an actual annual filing of form 2746-SD by 15 May. Past years covered by a valid commitment are not retroactively taxed solely because of the reform.
Does this affect a French SCI owned by individuals?
Generally less so if the SCI meets its own filing obligations (often form 2072), but any foreign entity in the ownership chain must be reviewed. Confirmation of the 2072 dispensation after the reform is still awaited from DGFiP.
Is the TVVI representative the same as the sale fiscal representative?
No. The 2027 TVVI designation under Article 990 FA is specific to the 3% tax procedure. Capital-gains representation for non-resident sales follows Article 244 bis A and accreditation rules of its own.
Do I need a SIREN to file?
In practice, yes for electronic filing. Many foreign trusts and investment vehicles do not hold a SIREN today and should start the formalities in 2026.
Has BOFiP been updated yet?
As of August 2026, series BOI-PAT-TPC still reflects the pre-reform engagement route. Refresh this analysis once DGFiP publishes new commentary.
How can FrenchNotaires help?
FrenchNotaires can match you with a bilingual notaire within about 48 hours to review deeds, SCI statutes and ownership chains, then coordinate with your tax advisers on the 2027 filing plan.
Sources
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