Local Property Taxes in France
Taxe d'habitation and Taxe foncière - find out about the various housing taxes due on property by owners and tenants in France...
There are two local property taxes in France payable by both residents and non-residents:
- Residence tax (or occupier’s tax) - Taxe d'Habitation
- Land tax - Taxe Foncière
A demand for payment is sent each year, usually in October and November, and must be paid by the specified date. If you don’t pay your taxes on time, you will incur a 10 percent penalty. You can also pay this tax in ten monthly instalments from January to October.
Taxe d'Habitation in France
The taxe d'habitation (residence tax) is paid by whoever is living in the property on 1 January, an audiovisual tax is included in the amount paid. It is paid by anyone who owns a residential property and uses it themselves (or has it available for their use), or it is paid by the tenant if the property is let. It is not usually apportioned if you move later in the year..
This French housing tax, deemed unfair by President Macron, is set to be abolished for up to 80% of households by 2020. The planned measures will see an initial 30% reduction in your residential tax bill from November 2018. To be eligible your income must not exceed a certain threshold, then you will benefit from a reduction of 30% in 2018, 65% in 2019 and complete abolition by 2020. Note that the proposed measures don’t apply to second home owners in France.
Who will benefit from housing tax cuts in 2018?
In 2018 it will be calculated based on declared income for 2017, and on your ‘revenu fiscal de référence’ (you can find this on the front page of your tax bill, the avis d’imposition under References).
The proposed thresholds are as follows:
- 1 part – 27 000
- 1,5 part – 35 000
- 2 parts – 43 000
- 2,5 parts – 49 000
- 3 parts- 55 000
- 3,5 parts – 61 000
- 4 parts – 67 000
- 4,5 parts – 73 000
- 5 parts- 79 000
So as an example, a single person with a ‘revenu fiscal de reference’ of €27000 will pay 30% less on their 2018 housing tax bill. This threshold increases depending on how many parts you have. So if you are a single parent living alone with two children, the threshold increases to €49000.
If your income is slightly above the threshold, for example a single person with no children and an income of €28000, the rate of reduction will decrease as the income increases. This would allow a gradual withdrawal from paying the tax, but slightly slower than for those whose income is lower than the threshold.
This doesn’t affect anyone who is already exempt, or partially exempt through previous rules. Note that anyone who pays the tax on wealth (ISF, which will become ISI in 2018) will not be able to benefit from this reduction.
The French Tax website has a simulator where you can calculate if you will be able to benefit from these measures in 2018.
This tax also applies to caravans and mobile homes if they are the taxpayer's main residence. The rate is €150 if the vehicle is less than 10 years old, and €100 if the camping car or caravan is between 10 and 15 years old. The tax is not payable if the vehicle is more than 15 years old.
Further information on the tax on mobile homes and caravans and the reductions that may apply in 2018 can be found on the Service Public website.
If you are over 60 years old as of 1 January (although there is no age restriction for widow/ers), and not subject to wealth tax, if your net taxable income does not exceed a certain amount, an exemption for the taxe d'habitation is given.
Further information on exemptions of housing tax for the over 60s can be found on the Service Public website.
Taxe Foncière in France
The taxe foncière is paid by the owner of the property, irrespective of who occupies it. If an owner sells the property part-way through the year the tax will be apportioned by the notary dealing with the sale.
The tax is divided into two parts: tax on the buildings (taxe foncière sur les propriétés bâties) and tax on the land (taxe foncière sur les propriétés non bâties).
Land used for certain purposes, such as farming, benefits from exemptions and reductions. For example, farming land receives a 20 percent deduction from taxe foncière.
The tax on the buildings is paid on any property that is habitable whether or not it is actually occupied. It does not apply to barns or other buildings actually used for agricultural purposes.
New houses, or renovated properties, used as a home are exempt from taxe foncière for the first two years after construction. Renovated properties can benefit from the exemption provided that reconstruction or additional construction work has been carried out (to change the shell, the size or the surface area of the building), and this is determined according to the nature and extent of the work carried out.
In limited cases the exemption can be extended to 10 or 15 years, for example to specific properties such as social housing.
As with taxe d'habitation, there are reductions available against the main home depending on your age and income.
Information about these reductions can be found on the Service Public website.