Alpine Angels on… French Property Tax

Buying a property in France is one thing, but successfully navigating a new tax system is quite another. Here at Alpine Angels we hope to answer some of your questions regarding French property taxes. French property tax - what am I supposed to pay? There are two main property taxes in France: Taxe Foncière and Taxe d'Habitation. Taxe Foncière is payable by the owner of a property. Taxe d'Habitation is payable by the occupier of a property. So what is Taxe Foncière? Taxe Foncière is a French land tax payable by the owners of French property and French land; whether you live in a property or not, if you own it, you must pay the tax. What is Taxe d'Habitation? Taxe d'Habitation is paid by whoever is living in the property on 1st January each year. It makes no difference if you are the property owner or the tenant. Whoever lives in the property on 1st January is obliged pay. Equally if you become the owner of a property on 2nd January this tax would be the responsibility of the previous owner. Taxe d'Habitation goes towards maintenance of roads, street lights, and street cleaning and includes the French television license fee and refuse collection. How is it calculated? Taxe d'Habitation and Taxe Foncière are set by the local authority for each particular region. Some regions are more expensive than others making it almost impossible to guesstimate rates of taxation by comparing your home with similar properties elsewhere. Taxe d'Habitation and Taxe Foncière are calculated using something called the notional rental value of a property (the "valeur locative cadastrale"). The notional rental value is the rent that the property might achieve on the open market taking in to consideration its size, condition and location. This is then discounted by 50% for running costs (N.B. This notional rent may not bear any relation to the actual rent being paid on a property. In fact some notional rent values date back to 1970!) A percentage rate is then applied to this notional rent based on the income that the local authority needs to raise for that tax year. As a general rule, towns are more expensive than villages and properties in the countryside are less expensive again. However if your property is situated in a tourist area, like a ski resort, there may be additional tax included in the Taxe d'Habitation for maintaining the area to a higher than normal standard. Also, if there is an exceptional expense, such as improving the sewage system, then there may be a separate one-off bill. Both taxes are reviewed annually. When do I have to pay it? They are both due on the 1st January for the coming year but the bills normally arrive in August / September and must be paid by the date specified (Taxe d'Habitation normally payable in November and Taxe Foncière normally payable in October). They can be paid by monthly installments. Are there any French property tax exemptions? People over the age of 75, people with disability pensions, people over the age of 65 with low incomes and students may all be eligible for discounts or exemptions as long as the property is their main residence. Purchasers of new properties may be entitled to an exemption from Taxe Foncière for the first 2 years after the completion of works. New homes constructed to an energy efficiency standard higher than current regulations maybe be entitled to a partial (50%) or full exemption at the discretion of the local authority. And if you are a landlord and you are having difficulty letting your property, or are carrying out major works rendering your property unsuitable for letting you can also apply for tax relief. Please contact your local tax office or Mairie for more details. We know at Alpine Angels that taxes are never fun. But within your local commune they pay for things like rubbish collection, recycling, street lights and street cleaning, schools and other community facilities, as well as the administration of these services. Wherever you live in France you will benefit from these local services. Top Tips & Cautionary Tales Taxe Foncière - Thinking of adding some snazzy features to your property like a new swimming pool or tennis court, perhaps some extra bedrooms or a Gite. Such additions can increase the “valeur locative cadastrale” (notional rental value) increasing your Taxe Foncière tax bill. You are also obliged to report any changes to the tax authorities (Centre des Impôts Fonciers or Bureau de Cadastre) within 90 days of completion of the work. Tax D'Habitation - It's worth checking to make sure that refuse collection is included in your Tax D'Habitation bill. Occasionally in some regions it is billed separately and in some parts of France refuse collection takes place 3 times a week which can be surprisingly expensive, especially if it's an unexpected cost! Tax Foncière (and refuse collection charges). When buying a property these charges are normally apportioned between the vendor and purchaser according to how long each will own the property for that year. Your Notaire will deal with this in the final conveyance deed (Acte de Vente). Be prepared that although a vendor will have received the Taxe Foncière bill for that tax year he could be entitled to an immediate proportionate reimbursement from the purchaser as soon as he has provided proof of payment. That's all for this “Alpine Angels on…”

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© Copyright Campion (UK) Ltd 2017.
FRANCE PROPERTY SALES SARL C.P. No CPI 7401 2016 000 004 662