Local Property Taxes

Find out about the various taxes due on property by owners and tenants in France...

There are two local property taxes payable by both residents and non-residents. The first owner of a property applies for the property to be registered for these taxes. The notary notifies subsequent changes of ownership. If the home is a main home, it should be mentioned as there are possible reductions that only apply to the main home.

A demand for payment is sent each year and must be paid by the specified date. Failure to do so will incur a 10 percent penalty.

Taxe d'habitation

The taxe d'habitation (occupier's tax) is paid by the occupant of a property. So, 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.

The tax is paid by the person who occupied the property on 1 January in any year. It is not usually apportioned if they later move.

Taxe d'habitation is raised and spent by the mairie of the area where the property is situated. It is calculated on the basis of the notional rental value of the property. This is assessed by the land registry (cadastre) to whom notification of any improvements or changes to the property must be sent within 90 days.

The amount charged to the occupier is the rental value multiplied by the tax rate fixed in the locality.

This tax also applies to caravans and mobile homes if they are the taxpayer's main residence. The rate is €25 per square metre. The tax is not payable if the surface area is less than four metres squared.

Various deductions for the main home (résidence principale) are available to those on very low incomes or with dependants.

Where the property is the main home, the occupant is over 60 as of 1 January of the relevant year (although there is no age restriction for widow/ers), and not subject to wealth tax, if the net taxable income does not exceed €10,024 for a single occupant, or €15,376 for married occupants (the single occupancy limit plus €2,676 per occupant), an exemption for taxe d'habitation is given. The 2011 taxable income is taken into account for calculating the exemption available against the 2012 taxe d'habitation.

Taxe foncière

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, attracts exemptions and reliefs. 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 spared 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 is an exemption available against the main home; however, this only applies where the occupant, for the purposes of the tax, is 75 or over as of 1 January of the relevant year. Again, the exemption for the current year tax is based on the level of taxable income in the previous year.

The maximum income levels for 2011 taxable income against the 2012 taxe foncière is €10,024 for a single person, and €15,376 for a married couple.  The calculation, which also applies to the exemption for taxe d’habitation depends on the number of "family quotient" (quotient familial) units available.

The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices as of 17 November 2011 which are subject to change. Tax information has been summarised; an individual must take personalised advice.

Tax rates, scope and reliefs may change.  Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change.  Tax information has been summarised; an individual is advised to seek personalised advice.

Blevins Franks are the leading international tax and wealth management advisers to UK nationals living in Europe. Visit www.blevinsfranks.com.