Property taxes in France
If you are looking into buying a property in France, you will need to know what the ongoing costs of owning a French property will be. You should be aware that as a homeowner in France, you pay not only one type of council tax but two (one of these does include your TV licence though!)
The two property taxes in France are the taxe foncière and the taxe d’habitation’, although the latter is gradually being phased out by 2020 for most households.
As a French property owner, you must pay these French property taxes whether you are a permanent resident or use the property as a second home or holiday home. Together the two taxes form the equivalent of the UK’s council tax. They cover local services such as street cleaning, waste collection and municipal lighting. So, what is the cost of council tax in France? Who has to pay council tax in France? When do you have to pay it?
This is payable by owners of French property. As the owner, it is your responsibility to pay this regardless of whether you live in the property or rent it out.
The taxe foncière is the more expensive of the two French property taxes. Just like UK council tax, the cost of this varies according to where the property is located as well as the cadastral value of the property. The local authority decides the amount of the taxe foncière and some regions are much more expensive than others.
The ‘Valeur Locative Cadestral’ (or in English, the notional rental value). Properties in France are assessed based on the estimated rent that the property might be expected to achieve in the open market. The cost of the taxe foncière is then typically calculated by halving that amount.
The owner is responsible for keeping information on any improvements, additions to the property etc. updated. Changes to the property such as the addition of a swimming pool or changing the use of the property (to a gîte for example) will affect the amount of taxe foncière.
These rental values were originally calculated back in the 1970s and are slowly being brought up to date throughout France in 2018, which means there could be an increase in the amount of taxe foncière owed for many properties.
The taxe foncière is usually payable every October and a date the payment must be made by will be provided on the form that you will receive in the post, usually during September. Although you can choose to pay the tax due in monthly instalments instead.
When you buy your French property is it important to let the tax offices know, as sometimes the first bill can be sent to your former or other address (i.e. English address) and this may mean that you don’t receive notification in time to meet the payment deadline, which can result in a fine for late payment.
If you have not received your form during September contact the local council offices to request it to ensure that you can make the payment on time.
This is paid by the occupier of the property, whether they are the owner or long-term tenant. So, if you own the property but rent it out, the taxe foncière is your responsibility but not the taxe d’habitation.
If you rent, you have to pay the taxe d’habitation. Note that the taxe d’habitation includes the TV licence fee so if you don’t have a TV, let them know and it will be deducted from your bill.
The taxe d’habitation costs less than the former, and again it varies from region to region. Generally speaking, towns and cities will be more expensive than villages or rural properties. This tax is payable in November each year.
If for any reason a renter defaults on payment of this, they will be given a fine of 10 per cent of the due tax by the local authority and if they refuse to pay, French law allows the tax authority to take the money directly from their bank account and they also have the authority to get their bank account ‘blocked’ via the Banque de France!
So, if you are considering letting a property, you are pretty safe since tenants do not normally want to risk such proceedings!
You should also be aware that if you are renting out your property CET Tax (Contribution Economique Territoriale) is payable by landlords on all rental properties. This is payable at the end of each year in December and can also be paid monthly.
Depending on when you purchase a property in France and your personal circumstances, you may benefit from the French government’s plans to phase out of the taxe d’habitation, which began in January 2018. The first-year reduction of 30 per cent applies to single persons whose net taxable income does not exceed €27,00 and couples whose taxable income is less than €43,000. This amount is further increased by €6,000 for each additional dependant in the household.
This will be followed by a 65 per cent reduction in 2019 and a 100 per cent reduction in 2020. It should also be noted that those with incomes that are only slightly higher than these thresholds may also be eligible for a smaller reduction.
Second homes are, unfortunately, excluded from the exemption, so those with a holiday home in France must still pay the tax (sorry about that). The French government has also actually given local authorities in some towns and cities the authority to significantly increase the taxe d’habitation on second homes. Councils are able to increase the tax by up to 60 per cent in more than 1,000 towns and cities, including Paris, Nice, Marseille, Bordeaux, Archachon, La Rochelle and more. Find out which towns and cities are affected by this here.
So, the cost of taxe d’habitation is not a straightforward question – it very much depends on your personal circumstances: whether you’re a French resident; how much you earn; whether you have any dependents; whether your property is your main residence or a second home and more!
Top tip: Some property particulars advertise the cost of the taxe d’habitation. Be careful when viewing properties, as this tax can vary depending on your personal circumstances. You should seek the advice of an independent lawyer who will be able to advise you according to your own situation. For a recommended English-speaking French lawyer call us on 01244 470339 or email firstname.lastname@example.org.
Tax exemptions and discounts in France
Some properties and people are subject to discounts and exemptions. For instance, some new buildings may be exempt from both taxes for the first couple of years. To obtain this discount you need to make an application to the authorities.
Reductions or exemptions can also be available for some French properties undergoing renovation or those that are deemed uninhabitable (this usually means those with no services connected and no furniture).
A reduced rate of the taxe foncière is also available for people aged over the age of 75 (if on low income), those with disabilities and students providing the property is their main residence. In addition, those aged over 60 may be completely exempt from the taxe d’habitation if they are not eligible for wealth tax and are on a low income.
However, these discounts will only apply if you have submitted a tax return in France declaring your income. It is best to enquire at the local tax office – Centre des Impots Fonciers or Bureau de Cadastre – about any of these reductions.
For more information about the cost of buying property in France or any other queries about buying property in France, please contact our friendly team on 01244 470339 or email email@example.com.
You can also download our handy Buying in France guide!
Article published: June 14, 2018