Vacant housing units: 2026, the last year before the single tax

The 2026 budget law merges the two existing taxes into a single tax effective January 1, 2027, and allows municipalities in high-demand areas to double the tax rates. Paris voted to implement the maximum increase as early as July 18.
 

Homeowners who leave a property vacant will spend their final year under the current system. Section 108 of the 2026 Finance Act, enacted on February 19, eliminates the tax on vacant housing (TLV) and the housing tax on vacant housing (THLV) effective January 1, 2027, replacing them with a single tax collected by local municipalities: the tax on vacant residential premises (TVLH).
 

The mechanism follows the existing geographic framework. In high-demand areas, the tax applies automatically after one year of vacancy, at a rate of 17% of the cadastral rental value in the first year and 34% starting in the second year. The new provision allows municipalities to raise these rates to up to 30% and 60%. Outside high-demand areas, the tax remains optional, takes effect after two years of vacancy, and its rate—set at the discretion of the municipality or intermunicipal authority—is capped at 50%. Previous resolutions are no longer in effect: local authorities wishing to maintain the tax must pass a new resolution before October 1.
 

Paris is going all out
The capital didn’t wait. On July 18, the Paris City Council voted to raise the rate to the legal maximum—30% after one year of vacancy and 60% starting in the second year—effective January 1, 2027. The city has set a goal of putting 20,000 properties back on the market. The cost of vacancy will therefore nearly double for affected property owners, in a city where the gap between rental yields and property values is already pushing many owners to do nothing.
 

The supply exists. According to the comprehensive report published by INSEE on August 27 based on the 2023 census, Paris has 139,075 vacant housing units, representing 9.9% of a total housing stock of 1,402,024 units. The proportion was 7.4% in 2012 and 8.5% in 2017. This tally excludes second homes and occasional residences—numbering 138,426—which are subject to a different tax regime. The definition used by INSEE covers a wide range of situations: housing offered for sale or rent, housing that has already been allocated and is awaiting occupancy, properties in the process of being inherited, properties retained by an employer, or housing kept vacant without a specific purpose.
 

This diversity explains the exemption rules. Properties occupied for more than ninety consecutive days in a year are exempt from the tax, as are those that remain vacant through no fault of the owner—particularly when they are offered for sale or rent under normal market conditions without finding a tenant—those requiring major repairs, and the housing stock of social housing agencies and mixed-economy companies. However, proof must be provided, which requires keeping records of listings, advertisements, and estimates.
 

Medium-Term Leases as a Workaround
Caught between the standard three-year lease and the vacancy tax, landlords are seeking middle-ground solutions. Medium-term furnished rentals—ranging from one to ten months—are aimed at professionals relocating for work, those on business assignments, and international students. Among specialized property managers in Paris, the average rental term is around eight months, with occupancy rates exceeding 90% in most arrondissements and an average of fifty-two days between booking and move-in.
 

However, the sector remains poorly documented. An observatory on furnished rentals, established by the firm Amarris Immo in collaboration with the Union of Furnished Rental Professionals and the Federation for the Defense of Property Owners and Co-owners, will publish on September 18 the results of an initial survey conducted since April among a panel of more than 3,000 landlords. The survey will focus in particular on landlords’ perceptions of regulatory and tax changes—a topic on which objective data has been lacking since the reform of the tourist rental regime.
 

For a property owner, the decision-making process this fall therefore involves three steps: checking whether their municipality is located within the tax zone—which currently covers nearly 3,700 municipalities, including high-demand urban areas and tourist destinations; check whether the municipality has voted to increase the tax rates; and compare the cost of one year of vacancy taxed at 30% of the rental value with the net income from a rental, even if it is intermittent.