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Taxe d’Habitation and Taxe Foncière / Property taxes

Taxe d'Habitation and Taxe Foncière Property taxes

The owners of a professional or residential building in France receive at this time a notice of “TAXE FONCIERE”. Similarly, people occupying a home will soon receive a notice of “TAXE D’HABITATION”. We will give you some details about the main features of these two taxes.

I – “Taxe foncière” (Property tax)

1. Taxable persons

This refers to any person who owns built or undeveloped real estate (in the case of bare land). It is the owner on January 1st who receives the tax of the whole year.

Both spouses are eligible but not in solidarity.

When a property is owned jointly by several owners, the tax is established in the name of all co-owners, the payment must result from an agreement between them.

In case of dismemberment of property, it is the usufructuary who is indebted.

In the case of sale of a property during the year, the seller may request, provided that it is stipulated in the deed of sale, the sharing of the amount pro rata temporis with the buyer.

2. Taxable real estates

  • Property tax on buildings:
    • All installations presenting the character of construction,
    • Bridges and communication channels,
    • Boats used at a fixed point,
    • Lands forming an addiction with a construction,
    • Naked non-cultivated land used for commercial or advertising purposes.
  • Property tax on unbuilt estates: All other fields (agricultural, etc.).

3. Tax calculation

  • Property tax on buildings: The basis of calculation is the “Valeur Locative Cadastale” (Cadastral Rental Value) which is as follows: The administration classifies the buildings of each municipality into several categories and determines a tariff for each. It then corrects this amount for each property according to its surface, its situation or its consistency.

    This “Valeur Locative Cadastrale” is then multiplied by 0.5 and the result gives the “Revenu Cadastral”.

    The tax rate for each local authority is then applied to the “Revenu Cadastral” to determine the amount to be paid.

    The main territorial authorities are the commune, the intercommunality, the department and the region.

    The tax also includes an element named “Taxe Ordures Ménagères”, the refund of this amount can be claimed by the owner to the tenant when it is a property for the purpose of a lease.

  • Property tax on unbuilt estates: The calculation mode is identical but the “Valeur Locative Cadastrale” is reduced by 20% to give the “Revenu Cadastral”.

4. Payment date

The tax notice is usually received by the taxpayer in the month of September and the payment deadline is October 15th.

In case of payment by internet, the delay is postponed to October 20th (or 25th in case of bank levy).
The taxpayer may request the monthly levy of his tax.

5. Discounts and exemptions

  • A permanent exemption applies to state property, rural buildings used by farmers and buildings used to produce photovoltaic electricity.
  • New constructions are temporary exempted (usually 2 years) but subjected to declarative obligations. Certain buildings (H.L.M. or buildings financed by a subsidized loan) are exempt for 15 years.
  • People over the age of 75 and persons with disabilities are exempt from tax on their principal residence.
  • There is also an exemption for people with low incomes. We can provide you, at your request, the amount of income thresholds.
  • Persons over 65 and up to 75 years of age can benefit from a € 100 rebate.

II – “Taxe d’habitation” (Residence tax)

1. Taxable persons

This tax is payable by any person who occupies an apartment or house for his dwelling on January 1st of the taxation year. This concerns:

  • Tenants and owners of their home,
  • Students for housing they occupy,
  • Free occupants,
  • Room-mates.

2. Taxable premises

These are dwellings occupied as dwellings (principal residence or second home).

The tax also covers land attached to the dwelling, parking spaces and garages.

Some premises are exempt, it is mainly:

  • Buildings used for farms (stables, barns …),
  • Premises intended for housing students in schools (boarding schools, university cities),
  • Caravans and mobile homes if they retain their means of mobility.

3. Tax calculation

The basis of calculation is, as for the “TAXE FONCIERE”, the “Valeur Locative Cadastrale” housing, to which the administration practices certain allowances.

This amount is then multiplied by the tax rates of the various local authorities (commune, inter-municipal, department, region) to calculate the tax due.

The payment notice for “TAXE D’HABITATION” also includes the fee for audiovisual services (€ 138 in 2018). Some people are exempt from it mainly:

  • People who do not have a TV, DVD player, blueray, etc provided it is mentioned on the tax return,
  • People who have a reference income equal to 0,
  • People over 60 whose income is below a certain ceiling, etc …

You can contact us for a complete list of exemption cases.

4. Payment date

The tax notice is usually sent by the administration between late September and early October, it is payable on November 15th.

This tax may be paid by monthly levies upon request of the taxpayer.

5. Discounts and exemptions

  • Total exemption: It relates only to the principal residence and concerns the following persons:
    • Disabled persons,
    • Aged over 60, not liable to “I.F.I.” (Tax on real estate fortune) and whose income from the previous year is below a certain ceiling.
  • Reductions: Persons not liable to “I.F.I.” whose income from the previous year does not exceed a reference amount based on the family situation benefit from a ceiling on their “TAXE D’HABITATION”.

With regard to the future of this tax: The Finance Act for 2018, which provides for new income ceilings for tax abatement or exemption of this tax, should lead to the disappearance of “TAXE D’HABITATION” in the years follow.

We will keep you informed of legislative evolutions through our next articles. If you need more information about this item, feel free to contact us!

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