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Overseas Buyer Guide › Costs & Taxes › Acquisition Costs

AAriane · Paris

2026/06

Buying in Paris — Acquisition Costs & Ownership Structure

Purchasing a resale apartment in Paris means facing not only the price agreed with the seller, but also a series of one‑time acquisition taxes and fees, plus the long‑term impact of your ownership structure on IFI, rental taxation, and exit economics. This page provides a reference framework for a €2M+ apartment in central Paris, focusing on resale properties and non‑resident or international buyers.

I. One‑time acquisition costs

For a typical resale apartment in Paris, what is commonly called “notary fees” is in fact composed mainly of transfer taxes and administrative charges, with the notary’s own remuneration representing only a limited portion of the total. In aggregate, one‑time acquisition costs usually amount to around 7–8% of the purchase price for resale property. New‑build properties (VEFA) follow a different regime, with acquisition costs closer to 2–3% and are not detailed here.

1. Breakdown of acquisition costs (resale property)

In Paris, the main components of the 7–8% acquisition cost are:

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New‑build properties (VEFA) are subject to a different regime, with lower acquisition costs of around 2–3%; this page focuses on the resale market.

2. Illustrative purchase budget (€2M example)

The following example shows the logic of a standard resale acquisition in Paris when agency fees are borne by the seller and already included in the sale price. It is designed as a quick budgeting reference rather than a substitute for a notarial statement.

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For higher values (for example €3M–€10M), the logic remains the same: the buyer should expect total acquisition costs broadly within the 7–8% range, subject to local variations and structuring choices.

3. Financing costs

Where the buyer uses bank financing, additional one‑off and recurring costs apply on top of acquisition taxes and notary fees. These depend on the bank, loan profile, and security package.

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Many high‑net‑worth buyers opt for Lombard financing, pledging a securities portfolio as collateral instead of selling assets. This can preserve market exposure and may be deductible against IFI as real‑estate‑linked debt, but introduces leverage risk and must be aligned with investment and currency strategy.

II. Ownership structures and IFI

Choosing an ownership structure is one of the most consequential decisions in a Paris acquisition. It affects IFI (French real‑estate wealth tax), rental income taxation, capital‑gains treatment on exit, and inheritance planning. It is also costly to change after completion, because shifting from one structure to another often triggers transfer duties and may crystallise gains.​

1. Main ownership options

For non‑resident or international buyers, the four main holding structures are:

  • Direct personal ownership

  • SCI à l’IR (transparent French civil real‑estate company)

  • SCI à l’IS (French civil real‑estate company electing corporate tax)

  • Offshore company holding a French SCI (cross‑border structure)

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Each structure has trade‑offs between simplicity, tax optimisation, transmission, and regulatory complexity.

2. IFI treatment by holding structure

As a simplified reference, IFI treatment is broadly as follows:

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Debt directly linked to the property can be deductible from the IFI base, but the exact treatment must be reviewed case by case with reference to treaties and current practice.

3. Direct personal ownership

Direct ownership is usually appropriate for buyers acquiring one property mainly for personal use, with a long holding horizon and relatively straightforward inheritance objectives.

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Key characteristics:

  • Simple to set up and maintain; all rights are in the owner’s name.

  • The full net value of the property is counted in IFI for owners above the €1.3M threshold.

  • Capital gains on resale follow the individual real‑estate regime, with time‑based abatements: income‑tax relief reaching 100% after 22 years of ownership and social‑charge relief reaching 100% after 30 years.

  • French forced‑heirship rules apply on death, which may limit flexibility for bespoke transmission unless combined with other planning tools.

4. SCI à l’IR (transparent regime)

An SCI à l’IR is a French civil real‑estate company taxed transparently: the company itself does not pay income tax; instead, profits and losses are allocated to partners in proportion to their shareholding.

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This structure is often chosen for:

  • Family ownership and co‑investment.

  • Long‑term holding where transmission planning is important.

  • Situations where flexible drafting of articles (statuts) is valuable to separate economic rights from voting rights.

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Key points:

  • Rental income and gains are taxed at the level of the partners, broadly as if they held the property directly.

  • IFI remains a look‑through tax: partners include the value of their share of the underlying property in their IFI base.

  • Exit capital‑gains regime mirrors direct ownership, allowing access to the 22‑/30‑year abatements.

  • The structure is not suited to significant furnished‑rental activity without careful analysis, as exceeding thresholds can change the tax regime.

5. SCI à l’IS (corporate regime)

An SCI that opts for corporate tax becomes a separate taxable entity. This can be attractive for rental‑driven projects, particularly furnished letting, where depreciation and loss carry‑forwards are material.

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Key points:

  • The SCI pays corporate tax on its profits, for example 15% up to a threshold and 25% above, subject to current law.

  • The property can be depreciated for tax purposes, reducing taxable profit over time.

  • Losses can generally be carried forward at the company level.

  • Capital gains on exit are taxed as corporate gains; the 22‑/30‑year individual abatements do not apply.

  • Dividends paid to shareholders are subject to tax at the shareholder level, creating potential economic double taxation.

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For IFI, the analysis is more nuanced: in many cases, holding‑company shares may be treated differently than direct property, but IFI planning should never rely solely on form without real substance.

6. Offshore company holding a French SCI

A cross‑border structure, such as an offshore company holding a French SCI, may be considered for certain international or multi‑jurisdiction families. It is legally possible but requires particular care.

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Key points:

  • Tax authorities examine substance: governance, real decision‑making, banking arrangements, and whether the structure has genuine economic rationale.

  • Treaty positions can influence IFI exposure and capital‑gains treatment.

  • Misalignment between form and reality can attract scrutiny and potential challenge.

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This type of structure should always be assessed in conjunction with international tax advisers and a notary before any acquisition.

III. Link to annual holding cost guide

Owning a Paris apartment also entails recurring annual costs: local taxes, co‑ownership charges, insurance, and, where applicable, IFI. For a detailed breakdown and examples based on a 100 m² second‑home apartment, please refer to AAriane’s Annual holding cost guide, which focuses on €2M+ properties in central Paris.

IV. Decision framework (simplified)

In practice, the right combination of price, structure, financing, and holding horizon depends on your profile and objectives.

 

As a simplified framework:

  • Primarily residential, long‑term use, single asset
    Direct ownership or SCI à l’IR are often appropriate, prioritising simplicity, favourable capital‑gains exit, and straightforward inheritance planning.

  • Family co‑ownership, multi‑asset strategy, transmission focus
    SCI à l’IR usually provides a good balance between control, flexibility, and tax transparency, especially when combined with lifetime gifting strategies.

  • Rental‑driven, furnished‑letting, cash‑flow optimisation
    SCI à l’IS may be considered to benefit from depreciation and corporate tax treatment, but the impact on exit and IFI must be evaluated carefully.

  • Complex cross‑border wealth, treaty and succession considerations
    Offshore‑company + French SCI structures can be relevant, but only with genuine substance and specialised advice; they are not a standard retail option.

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AAriane works with Paris‑based notaries and tax advisers to build a tailored acquisition and holding strategy before you sign any purchase offer.

V. Frequently asked questions — €2M+ Paris apartments

Q1. Are acquisition taxes the same for non‑resident buyers as for French residents?

Yes. Transfer taxes and notary fees apply on the same basis to residents and non‑residents. Nationality and tax residence do not change the rates; what changes is how the property fits into your overall tax and reporting position.

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Q2. Is it possible to finance a Paris purchase against my investment portfolio (Lombard loan)?

Yes. Many private banks offer Lombard financing, where you pledge a diversified securities portfolio or cash as collateral to borrow for your property purchase instead of selling the assets. This preserves market exposure, can offer competitive rates, and may be deductible against IFI as real‑estate‑linked debt, but it introduces leverage risk and requires careful alignment between portfolio risk, loan covenants, and exit strategy.

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Q3. How many years do I need to hold a second‑home apartment to benefit from full capital‑gains relief?

Under the individual real‑estate regime, the taxable gain for income‑tax purposes is fully exempt after 22 years of ownership, while social charges are fully exempt after 30 years. These time‑based abatements apply to direct ownership and, in most cases, SCI à l’IR structures.

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Q4. Does using an SCI automatically reduce my IFI exposure?

Not automatically. For SCI à l’IR, IFI generally looks through to the partners, who include their share of the underlying property in their IFI base. SCI à l’IS can change how assets and debt are reflected, but structure alone does not make IFI disappear; any potential advantage must be assessed in the context of your whole balance sheet, loan structure, and treaty position.

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Q5. What annual budget should I plan to hold a 100 m² second‑home apartment in central Paris?
For a 100 m² second‑home apartment valued around €2M, a realistic range for annual fixed holding costs is €16,000–€24,000, combining property tax, residence tax, co‑ownership charges, insurance, and IFI where applicable. This excludes mortgage interest, major works, and optional concierge or property‑management services.

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Q6. Can I change my ownership structure after buying if I realise I chose the wrong one?
Changing structure after acquisition is possible but usually expensive. Transferring a property from direct ownership into an SCI or another vehicle typically triggers transfer duties and may crystallise capital gains, so it is generally more efficient to design the right structure before you sign the purchase contract.

French tax and ownership structuring should always be reviewed case by case. This guide is for general information only and does not constitute legal or tax advice.

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→ Companion guide: Owning a Paris Apartment — Annual Holding Costs for Self-Use

AAriane · 3 avenue Duquesne, 75007 Paris · Licensed Real Estate Consultant · Services in Chinese, English, and French · Direct listings, no referrals

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