The owners, whether they are residents or not, of a professional or residential building in France receive at this time a notice of “Taxe foncière”. Similarly, people who are not yet totally exonerated occupying a home will soon receive a notice of “Taxe d’habitation”. Indeed, before the final abolition of this tax scheduled for 2023, all taxpayers benefit from a partial or total exemption from the “housing tax” in 2022 on their main residence only.
We will give you below some details about the main features of these two taxes as well as the housing tax on vacant housing.
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:
- Constructions fixed to the ground in perpetuity;
- Commercial or industrial installations assimilated to constructions (workshops, hangars, industrial buildings, etc.);
- Storage facilities;
- Masonry works having the character of real constructions;
- Bridges and communication channels;
- Boats used at a fixed point;
- Lands forming an addiction with a construction;
- Certain uncultivated land assigned to industrial or commercial use, with the exception of land assigned to the practice of golf.
Property tax on unbuilt estates:
- Bare land used for agriculture;
- Mines and peat bogs;
- Ponds, salt pans and salt marshes;
- Lands occupied by greenhouses used for agricultural purposes;
- Golf courses, whatever their operating conditions.
3. Tax calculation
Property tax on buildings:
The basis of calculation is the “Valeur Locative Cadastale” (Cadastral Rental Value) which is determined as follows:
- For residential premises, by comparison, this method consists in defining categories of buildings (8 categories) according to their quality at the national level and in each municipality and then, for each category, in determining a tariff of valuation per square meter. As of the 2026 taxes, the rental value will be determined using a tariff method;
- For professional premises, artisanal industrial premises and small industrial establishments, based on the rents actually recorded according to the state of the rental market, by applying a rate per square meter to the weighted surface area of the premises;
- For industrial establishments and industrial land and buildings listed in the assets of companies whose main activity is the rental of these assets, according to the accounting method.
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.
Note: The municipalities and other territorial authorities may institute, upon deliberation, an abatement on the rental value, of which here are two examples:
- 30% for industrial or commercial premises converted into housing, located in collective buildings and in a municipality on whose territory one or more QPVs are located;
- 50% for buildings assigned directly to research operations.
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 payment of local taxes for individuals (property taxes, in particular) is due 30 days after the date of collection of the role. Any payment made 45 days after this collection is subject to a 10% increase for late payment.
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
There are many cases of exemption, here are the most common:
Property tax on buildings:
- A permanent exemption applies to state property, rural buildings used by farmers and buildings used to produce photovoltaic electricity;
- New constructions are temporarily exempt (usually 2 years) but subject to declarative obligations. Certain buildings (H.L.M. or buildings financed by a subsidized loan) are exempt for 15 years;
- Exemption from 2 to 5 years in favor of companies benefiting from a tax exemption on profits (new companies created in AFR zones – companies created to take over a company in difficulty – very small companies created or taken over in ZRR);
- Exemption of 50% or 100% for 3 years for dwellings completed before 1989 subject to energy saving works;
- Exemption of 50% or 100% for 5 years for new homes completed from 2009 meeting a level of overall energy performance higher than that imposed by the legislation in force;
- Exemption for social housing for 15 to 30 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.
Property tax on unbuilt estates:
- Optional exemptions (decided by municipalities and other local authorities) for 5 years for certain plots operated according to an organic production method;
- 50% relief (or 100% by decision of local authorities) for plots operated by young farmers who receive installation aid;
- Further relief may be requested in the event of loss of crops or loss of livestock.
II – “Taxe d’habitation” (housing 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.
Note: The occupation must be private. For premises occupied by private organisations, the tax is not payable for premises open to the public.
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, etc.);
- Premises intended for housing students in schools (boarding schools, university cities);
- Caravans and mobile homes if they retain their means of mobility.
As of 2023, only the following will be subject to housing tax:
- Secondary residences and other furnished premises not assigned to the main dwelling;
- Furnished premises occupied on a private basis by entities (associations, in particular) and not subject to the business property tax (CFE) as well as furnished premises without an industrial or commercial character occupied by public or local bodies.
3. Tax calculation
The basis of calculation is, as for the “Taxe foncière”, the “Valeur Locative Cadastrale” housing, to which the administration practices certain allowances. There is a mandatory allowance for family expenses as well as a few other optional 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 notice of payment of the “Taxe d’habitation” also included the tax for audiovisual services (€ 138). This tax is abolished from the year 2022.
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
- Before the definitive abolition of the “taxe d’habitation” from 2023, all taxpayers benefit from an exemption in 2022 relating to their main residence. Provided that the taxpayer was not liable for the IFI (real estate wealth tax) for 2021, the exemption from housing tax 2022 is:
- Total for taxpayers whose reference tax income (RFR) 2021 does not exceed € 28,150 for the first part of the family quotient;
- Partial for taxpayers whose RFR 2021 is between € 28,151 and € 29,192 for the first part of the family quotient.
The thresholds indicated above are different for the other family coefficient parts, you can contact us to find out their amount.
For all other taxpayers, including those subjects to the 2021 IFI, the 2022 exemption is 65%.
- Where not benefiting from the above exemption, persons over the age of 60 on
January 1st of the tax year and, regardless of their age, widows and widowers, not liable to the IFI the previous year, and whose RFR for the previous year does not exceed certain limits are totally relieved of the tax relating to their main residence when they occupy it with one or more adult children taxed separately on income tax, registered as job seekers and do not have resources above a certain amount.
The limit thresholds allowing to benefit from this exemption depend on the family situation (family quotient), we can indicate them to you on your request.
III – Vacant housing taxe
1. Annual tax definition
Vacant housing located in municipalities belonging to an urban area of more than 50,000 continuous inhabitants where there is a marked imbalance between supply and demand for housing is subject to an annual tax.
The tax is due for each accommodation, habitable and unfurnished, vacant at the same time:
- On January 1st of the year preceding that for which the tax is established;
- On January 1st of the tax year;
- Who has not been employed for more than 90 consecutive days during the year preceding that of taxation.
It is not due in the event of a vacancy beyond the control of the taxpayer. Housing belonging to HLM organizations and semi-public companies, intended to be allocated subject to means testing, does not apply.
2. Annual tax calculation
The tax rate is 12.5% of the rental value of the housing (determined as for housing tax) the first tax year and 25% from the second year.
3. Housing tax on vacant housing
Municipalities and other local authorities (other than those referred to above) may decide to establish, for their share, the housing tax on premises for residential use, habitable and unfurnished, vacant for more than 2 years on January 1st of the tax year. These local authorities may subject these premises to housing tax on second homes from the 2023 taxation.
Housing owned by HLM organizations and semi-public companies, intended to be allocated subject to means testing, are exempt.
The exemptions, reductions and allowances provided for the housing tax (see above) are not applicable.
All the team of French Business Advice is at your disposal to help you, so do not hesitate to contact us!
