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Homeowners in France hit by tax rise shock

Homeowners in France face bad news as property tax bills have shot up this year - in some areas rising by 136 percent.

Published: 3 September 2019 10:25 CEST
Homeowners in France hit by tax rise shock
The property owner's tax has risen sharply in some areas this year. Photo: AFP

Anyone who owns a home in France will be receiving a letter or email from the tax authorities concerning their taxe foncière – the tax that building owners must pay in France.

READ ALSO What is the taxe foncière and do I have to pay it?

And the bad news is that in many areas the bill is likely to be significantly higher than last year.

The tax is set by local authorities, so varies from region to region and département to département, but French newspaper Le Parisien reported that in some areas of France, including the Auvergne and Isère, the increases were up to 136 percent.

READ ALSO


Significant repairs or renovations could affect the tax value. Photo londondeposit/Depositphotos

Why the increase?

Well it could be to do with the abolition of the taxe d'habitation (household or council tax). The taxe d'habitation is paid by the person who lives in the property, rather than the person who owns it, and had been widely criticised for being unfair and outdated.

The French government has been slowly abolishing the taxe d'habitation for most residents as promised by Emmanuel Macron as part of his 2017 election manifesto.

While most people were delighted at the thought of paying less tax, it created rather a headache for local authorities, who collect the tax and is a key part of their budget.

There has therefore been speculation that the increase in the taxe foncière is a way for local authorities to fill the hole in their coffers.

Pierre Hautus of the Union nationale des propriétaires immobiliers (national union of real estate owners) told Le Parisien: “It is a way to increase the tax yield for local elected officials while the abolition of the housing tax continues”.

Is that true?

Well the government denies that and says there is “nothing extraordinary this year” and the increases are simply due to reevaluations of the rental value of properties – which is what the tax rate is based on.

A total of 134,000 properties in France have been reevaluated over the course of 2017/2018, since many of the previous valuations were done in the 1970s.

“They take place on a case-by-case basis, at the request of the departmental director of the public finance centre,” said a spokesman for the French finance ministry.
 
“Such operations are carried out each year in all departements, depending on local issues, it is specified.
 
“They resulted in a review of the assessment of approximately 134,000 premises in each of the years 2017 and 2018. In 2016, 149,000 premises were re-evaluated.
 
“Clearly: there has been no disguised increase in local taxes in recent years.”
 
Is there any way to challenge the bill?
 
Home owners may contest the level of the increase – particularly if they have done no significant work or renovation on their home in recent years – but the challenge must be lodged with the local authority within two months of receiving the tax demand.
 
If you have not challenged it in time, you must pay by mid October.
 
Is there any good news for home owners in France?
 
Not really, especially for second home owners, who in some areas are subject to extra taxes.
 
Although the taxe d'habitation is in the process of being scrapped for the majority of people, the exception to that is second homes, so if you own a second home you will continue to pay both the taxe d'habitation and the taxe foncière.
 
If you own a second home in a zone tendue – an area where there is a designated housing shortage – the local authorities are also allowed to drastically increase your taxe d'habitation. Here's a complete list of the French towns and cities considered a zone tendue.  
 

 

 

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PROPERTY

Property taxes: How much will it cost to extend your French home?

Installing a swimming pool, building a garden shed, or adding a conservatory to your French home has become more expensive in 2023.

Published: 11 January 2023 15:49 CET
Property taxes: How much will it cost to extend your French home?

If you are planning a renovation project in 2023 you’re likely looking at rising cost for materials and labour due to inflation – but there is one other cost to consider; taxes. 

In France there is a one-off tax that has to be paid on certain building works, and the government has raised the rate for this.

The taxe d’aménagement, sometimes referred to as the garden shed tax, applies to all property development – construction, reconstruction and extension – of buildings that require planning permission or a building permit.

Garden sheds, swimming pools or extensions with a surface area of more than 5 square metres are subject to the development tax – although a 50 percent reduction is applied to the flat-rate values of certain buildings, particularly the first 100 square metres of main residences.

READ ALSO Everything you need to know about installing a swimming pool at your French property

The tax is collected by local councils, who set their own percentage rates for the tax, working off the base rate set by the government.

A decree published in the Journal Officiel set the base figures for 2023 at the following rates: 

  • €1,004 per square metre in Île-de-France (up from €929 per square metre in 2022);
  • €886 per square metre outside Île-de-France (€820 per square metre in 2022).

The flat-rate values per square metre of building space, which constitute the basis for the development tax, are revised on January 1st of each year according to the latest construction cost index published by national statistics body Insee. 

Additionally, specific rates are set for:

  • €250 per square metre  for a swimming pool (up from €200 in 2022);
  • €12 per square metre of ground-fixed solar panels (up from €10 in 2022);
  • €3,000 per wind turbine more than 12 metres high;
  • €3,000 per pitch for tents, caravans and mobile leisure homes;
  • €10,000 per pitch for a holiday chalet or bungalow.

The amount of the tax is calculated according to the following formula: 

(Taxable area multiplied by the government-set base figure) multiplied by the percentage tax rate set by the local authorities. This gives the total to be paid in cents. Bills are rounded down.

So, the tax for a 30 square metre extension in an area where the combined local and departmental tax rates total 6.25 percent would be calculated like this:

30 (the size of the development) x 886 (the base tax rate outside Ile-de-France) = 26,580

6.25 (local and departmental tax) x 26,580 = 166,125 cents, more usually expressed as €1,661. 

If the total payable is less than €1,500, you will receive a bill in the six months after planning permission was granted, with details of how to pay.

Otherwise, it is paid in two instalments, 12 months and 24 months after authorisation, with a 10 percent surcharge applied in cases of late payments.

READ ALSO The hidden costs of owning property in France

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