Taxe foncière is a land tax, and is paid by the owner of the property.
Taxe d’habitation is a residence tax. You have to pay this tax if you own a property and live in it yourself (or have it available for your use, or rent it out on short-term lets). Where properties are rented out long-term, the tenant pays.
Both taxes apply to non-residents as well as residents, and are often higher on second homes than on main residences due to possible discounts on the main home.
Demands for both taxes are sent annually, the bills or avis d’impôt start going out in September each year. The amount must be paid by a specified date, usually in October (taxe foncière) and November (taxe d’habitation) but varies from place to place. Failure to pay on time incurs a 10% penalty.
Payments can be made by cheque, interbank payments, bank transfers or online. There is more time to pay online, the deadline is usually extended a few weeks later than for the paper version.
Taxe foncière tax is paid by the owner of the property, irrespective of who occupies it. The tax is divided into two parts: tax on buildings (taxe foncière sur les propriétés bấties) and tax on land (taxe foncière sur les propriétés non bâties). The latter is no longer levied locally and is levied nationally instead. The tax on buildings is paid on any property that is habitable, whether or not it is occupied.
If you sell a property part-way through the year the tax is apportioned by the notary dealing with the sale.
An exemption is available against the main home if the occupant is 75 or over (or in receipt of certain disability or old age allowances) as at 1st January of the relevant year, based on the level of taxable income in the previous year. The calculation, which also applies to the exemption for taxe d’habitation, depends on the number of “family quotient” (quotient familial) units available.
For the 2017 taxe foncière, the maximum income levels based on 2016 income is €10,708 for the first family quotient unit (so this is the limit for a single person), and then €2,856 for all extra half units.
Where the taxpayer is aged between 65 and 75 at 1st January and their taxable income falls below the above limits, a flat €100 discount is available against the taxe foncière payable on their main home (unless they share the house with anyone other than a spouse or dependant).
Exemptions and reliefs are available on land used for certain purposes such as farming.
New buildings and renovated properties used as the main home are exempt from taxe foncière for the first two years after construction. Renovated properties can benefit provided that reconstruction or additional construction work has been carried out, and is determined according to the nature and size of the work. A special Tax Form (H1 or IL) must be filed with the local tax authorities within 90 days of completion of the property or renovation works.
Taxe d’habitation is determined by local and county councils and is spent on community services by your local municipality. It is paid by the household living in the property on 1st January each year, whether it is an owner or tenant, or by the owner if vacant.
The tax is based on a notional rental value for the property multiplied by the tax rate fixed in the locality. The rental value is assessed by the land registry (cadastre) to which you must send notification of any improvements or changes to the property within 90 days. It is possible to appeal against their decision, but the margins involved are generally small.
There are various deductions available on the main home for people on very low incomes or with dependents. For example, three children would attract a discount of 35% of the average taxable value for the immediate area. These percentages can be further increased by 5%-10% per dependent if the municipality decrees.
Also, a couple with three children would start to see further discounts of 1%-15% where their annual household income did not exceed a certain threshold (€10,708 for the first family quotient unit – so this is the limit for a single person – and then €2,856 for all extra half units) provided the valeur locative [the rental value according to the land registry] of the main home is below 130% of the average valeur locative in the area.
For people aged over 60 or for widows/widowers (no age restriction) who occupy the property as their main home as at 1st January and who are not subject to wealth tax, if their net taxable income does not exceed €10,708 for a single occupant, or + €2,856 for each additional ‘half-part’, an exemption for taxe d’habitation is given. The 2016 taxable income is taken into account for calculating the exemption available against the 2017 taxe d’habitation.
Taxe d’habitation also applies to mobile homes and caravans if they are the taxpayer’s main residence. The rate is €25 per square metre but is not payable if the surface area is less than four metres squared.
Note that for both taxes, most exemptions apply to the main home, and as such will not apply if you are not French tax resident.
Blevins Franks is the leading international tax and wealth management advisers to British nationals living in Europe. Contact: Freephone UK: 0800 668 1381, Freephone France: 0805 112 163, or visit www.blevinsfranks.com.
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.
More information on local taxes in France