Property Taxes in France

Posted by admin in Property Investment, Property Letters | September 12th 2004

The two principal taxes on residential property are collected by the State for the benefit of the local authorities

The main taxes are

taxe foncière

taxe d’habitation

These are specific to residential propety. Commercial property is a bit different, and wont be gone into here. These taxes are each assessed annually, and they vary in very substantialy. The commune rate of tax is often higher in main towns than in suburbs or small villages.

Taxe foncière is charged to the owner of residential property. The owner of the property on the first day of January is responsible for paying the tax for that year

Taxe d’habitation is also applicable residential property, but it is due from the occupant, not neccessarily the owner. The occupant on the first day of January is responsible for paying the tax for that year. If the tenant vacates the property the owner remains jointly liable

How they are Calculated:

Tax Fonciere:

The tax represents the notional annual rent if the property was let on the open market. However it is often substantially lower than the market rental value.

Every year, it is multiplied by a factor to reflect the national variation of prices. Periodically the tax authorities review the individual values of properties – the last overall review took place in 1974.
After relief for various allowances, the net base is multiplied by the current tax rates. A collection fee is added for the State.

Two different rates are applicable for developed and undeveloped land, about which more details are available on request, but the complexity is too great for the scope of this overview.

Taxe d’habitation

Also calculated by reference to the notional rental value of the premises

Discounts and allowances:

For taxe d’habitation there are allowances for the principal residence and for dependent persons. Discounts are granted for the disabled, aged and those on a low income. There are allowances against taxe foncière for new and reconstructed properties and for certain additions to existing properties

Payment

Those liable to pay taxe foncière or taxe d’habitation will be notified of the amount by an avis d’imposition which will state the amount due and the time for payment. They are usually received towards the end of August and September for payment by October 15 and November 15.There are penalties imposed for late payment.

Once can pay by monthly instalments.

If you sell

If the property is sold the seller and the buyer often agree to share the tax, by a clause inserted in the compromis de vente. This does not change the legal debtor of the tax, being the owner on January 1.

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