Taxes Foncieres & Habitation for property in France

Taxes Foncieres & Habitation for property in France

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 tax and property tax.

Property Tax (taxe 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 will I pay for property tax?

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 tax rate varies according to each municipality. Paris will notably be subject to an extraordinary rise of the tax rate from 13.5% in 2022 to 20.5% in 2023. The tax is due for payment in October each year.

Can I qualify for exemptions or reliefs?

•    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 those over certain ages, students, or those with disabilities. These exemptions are for low-income earners only.

Residence/Occupancy Tax (taxe d’habitation)

Am I liable for residence tax?

Since the 2018 reform, the residence tax is being progressively phased out for main residences. From 2023, the residence tax only applies to 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).

How much will I pay for residence tax?

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 the tax is due for payment in October each year at the same time of the property tax.

Our UK based French legal experts specialise in taxation, wealth tax, succession, etc... They have extensive knowledge of French tax and the system, contact François for more details. Before you contact them, we recommend you familiar yourself with the buying process and about the actual 5 steps to complete a purchase. Finally, our fx experts can also assist if you are looking for a reliable currency trader in a fast moving and competitive market.