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France: Local French property taxes and taxe professionnelle

Both residents and non-residents pay these taxes. The taxes payable can be divided into several categories:

TAXE D’HABITATION (DWELLING TAX)

The taxe d’habitation is paid if you own a residential property and use it yourself (or have it available for your use). It is paid by the tenant if you let the property. It is paid by the person who occupied the property on 1st January in any year. It is not usually apportioned if they later move.

The tax is raised and spent by the town hall (mairie) in the area where you live.

It is calculated on the basis of the notional rental value of your property. This is assessed by the land registry (cadastre) to whom you must send notification of any improvements or changes to the property within 90 days. You can appeal against their decision, but the sums involved are usually so small it is not worthwhile.

The amount you will be charged will be the rental value multiplied by the tax rate fixed in your locality.

Various deductions are available to those on very low incomes or with dependants.

TAXE FONCIÈRE (LAND OR PROPERTY TAX)

The taxe foncière is paid by the owner of the property, irrespective of who occupies it. If you sell the property part-way through the year, the tax will be apportioned by the notaire dealing with the sale.

The tax is divided into two parts: tax on the buildings (taxe foncière bâtie) and tax on the land.

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 your 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 size of the work carried out. Farming land receives up to 20 per cent deduction from taxe foncière.

In order to qualify for the exemption, a special tax form (H1 or IL) must be filed with the local tax authorities within 90 days of completion of the property or the renovation works.

In limited cases, the exemption can be extended to ten or 15 years, for example to specific properties such as logements sociaux, or social housing.

Tax on the land is always payable unless it is used for agricultural purposes. Farming land receives up to 20 per cent deduction from taxe foncière.

LOCAL PROPERTY TAXES

The first owner of a property applies for it to be registered for these taxes. The notaire will notify subsequent changes of ownership. If the home is a second home you should say so. Your tax bill will be reduced as, logically, you are not using as many services.

A demand for payment is sent each year. The sum claimed must be paid by the specified date (which varies from place to place). Failure to do so incurs a ten per cent penalty. It is probably simplest to arrange for payment from your bank by direct debit.

The combined total of these taxes is low, perhaps £100 for a small cottage or £400 for a larger house (the equivalent of €150/€600).

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Page 2: PROPERTY PURCHASE COSTS – PROPERTY SUBJECT TO TVA (VAT)

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