Guide to the French Tax Foncieres and Taxe d'Habitation
Originally posted on & updated on 14th November, 2024
Here are a few Q and A’s to learn about Taxes Foncieres and Habitation for property and real estate in France. If you own, rent or have the right to occupy a property in France, you are likely to be subject to local taxes including, but not limited to, housing (habitation) tax and property tax (foncieres).
Property Tax in France (Foncière)
Am I liable for property tax?
The property tax is levied if you own a French property as of 1st of January each year, whether you occupy it or not.
How much tax will I have to pay?
The tax base is re-valuated each year and is based on the theoretical rental value of your property (valeur locative cadastrale), indexed on annual inflation. A complete re-valuation is due by 2026 so the tax base of your property may change significantly. A 50% discount is applied to the tax base to take into consideration maintenance expenses such as insurance, repairs, management, etc. The deadline for the Taxe Fonciere this year is 20th October 2024.
The tax rate varies according to each municipality or commune. Many property owners are likely to see an increase in the tax amount in 2024. For example, property tax will be increased in Nice (+15.8%), Annecy (+13.4%), Villeurbanne (+10%), Le Cannet (8,8%), and Bayonne (3,1%).
Do I qualify for exemptions or relief?
• New build exemption - A full or partial relief is available in the first two years of the construction.
• Energy-efficient property relief - a 50% or 100% relief is available for up to five years for properties meeting energy efficiency requirements. Relief may also be available for properties undergoing energy efficiency improvement.
Relief and exemptions may also be available to people over certain ages, students, or those with disabilities. However, these exemptions are for low-income earners only.
Residence/Occupancy Tax (Habitation)
Am I liable for occupancy tax?
The French occupancy tax was abolished for all main residence on 1 January 2023. It continues, however, to be payable on other premises such as second homes. You are liable to this tax when you own, rent or have the right to occupy the property at any time.
The housing tax is not applicable to unoccupied properties. However, in certain municipalities, a tax is levied on properties that have not been occupied for more than a year (taxe sur les logements vacants or taxe d’habitation sur les logements vacants).
A new reporting system was introduced in order to determine which property is occupied as the main residence of the occupant and so whether the property should be taxed or not. See our article on the occupancy declaration.
How much residence tax will I pay?
The tax base is the same as for property tax, although the 50% reduction of the tax base does not apply. The tax rate varies according to each municipality and also depends on the characteristics of the property. It applies to furnished premises and outbuildings, including garages.
Depending on the location of their property, owners of second homes may also experience higher costs due to new surcharges on their taxe d’habitation bill. Indeed, recent changes have expanded the number of communes that can apply an additional surcharge if they are located in areas with a housing shortage.
This means thousands of new communes are now eligible to impose the surcharge, which can reach up to 60% of the main tax bill.
For 2024, about 1,400 communes have chosen to do so, up from around 300 last year. This affects popular second-home destinations such as St Tropez on the Riviera, Saint-Malo and Quiberon in Brittany, and Chamonix in Haute Savoie in the Alps.
When is the tax payment deadline for 2024?
Even though the taxe d’habitation on the main residence was abolished on January 1st, 2023, it is maintained on second and holiday homes.
The taxe d’habitation on second homes is collected for the benefit of local authorities. Its amount varies from one municipality to another and also depends on the characteristics of the property. It applies to furnished premises and outbuildings, including garages. No reduction can be applied.
Notices of imposition of this tax are sent each year in November :
If you are already registered online with the local authorities, the tax demands are available in your member area on the impots.gouv.fr website from 20 September 2024 if you pay annually and from 28 August 2024 if you pay monthly. Otherwise paper notices will be sent between 28 August and 9 October 2024 depending on whether you pay monthly or annually. The deadline for the taxe d’habitation this year is 15th December 2024.
In any case, it’s essential to look out for these important official documents, especially if you are not planning to return until next year.
For Expert Tax Advice
Our French legal experts specialise in taxation, wealth tax, succession, etc… They have extensive knowledge of French tax and the system, contact François Mouniélou for more details. Before you contact him, we recommend you familiar yourself with the buying process. Finally, our foreign exchange experts can assist with all your currency needs in a fast moving and highly competitive market, commission free.
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