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PROPERTY

Taxe foncière: What exactly is the French property tax and do I have to pay it?

If you own a property in France you will have either just received or be about to receive a fairly hefty tax bill, but what exactly is the taxe foncière, how is it calculated, and who gets all the takings?

Taxe foncière: What exactly is the French property tax and do I have to pay it?
Photo: AFP

The taxe foncière is a tax paid by all property owners in France. It is separate to the taxe d’habitation, which is paid by whoever occupies the property (whether they are an owner or a tenant) and applies to anyone who owns a building or land.

The taxe d’habitation is slowly being phased out (except for second homes) but the taxe foncière is here to stay, and in fact in many areas is increasing quite steeply.

How is it calculated?

We hope you’re good at maths, because the formula used to calculate this is pretty complicated.

The formula used to calculate the annual taxe foncière bills – which come out in the autumn – is complicated, but it’s based in part on the rentable value of the property – so if you build a large extension or add a swimming pool you can expect your bills to go up.

READ MORE: French taxman launches crackdown on undeclared property extensions

First you take the rentable value of your property – how much you could expect to get if you rented it out. You don’t get to calculate this, it’s calculated for you by your local authority, under the auspices of a formula set by the French finance ministry. Many areas have been using a formula that was years old (in some cases dating back to the 1970s) to calculate rentable value, but over the past three years many local authorities have requested a reevaluation from the finance ministry, with the result that in some areas tax bills have jumped sharply this year.

Once you have the rentable value you then divide it by two, then multiply it by the tax level set by your local authority.

The local authority’s tax rate varies hugely from place to place, which is why two people with similar sized homes in different areas can end up with wildly different bills.

In fact to make it more complicated it’s actually three local authorities – the commune, the département and the région – which all set their own tax rates then divide up your tax to pay for local services.

The good news is that you don’t need to do all this maths yourself, your local authorities will calculate it all then present you with a single bill, known as the avis d’impôt.

What happens then?

Well if you agree with it you pay it, the deadline for payments this year is October 15th or October 20th if you’re paying online.

Your property tax notice should have been available since August 29th if you are not paying monthly, and September 19th if you are paying monthly. If you opted to pay online, you should have received an e-mail informing you that your notice is available in the “Documents” tab of your personal space.

If you are paying by post, then you should have received your notice in September. 

If you don’t agree you can challenge it. You can’t argue with your local authority’s tax rate, but if you feel that the rentable value that they have given you is wildly unrealistic then you can challenge that.

READ MORE: Reader question: How can I challenge my French tax bill?

The rentable value (valeur locative) is printed on your bill so you can see how they have calculated it. As mentioned many people will see a big increase this year, but that’s more likely to be because they were previously under paying due to an out-of-date formula than because the new calculation is not right.

However if you feel that the rentable value they have given you is simply unrealistic then you can challenge it, although any challenge must be received by your local authority within two months of getting the bill otherwise it will not be considered.

If you’ve added any major features such as a conservatory, garage or swimming pool this must be declared and is likely to increase the rentable value of your house.

Does everyone have to pay it?

The tax is for everyone who owns a building, regardless of whether they live in it full time or not. It’s also payable on land, although at a much lower rate, so if you’ve bought a plot but haven’t yet started building your dream home you will still be paying tax.

It’s billed from January 1st, so if you’ve bought a place in the last nine months, you won’t have to pay until next year. Likewise if you have recently sold a building or plot of land you will still be liable for the tax.

Vacant properties are still liable for tax, even if you’re doing renovation work and it’s currently uninhabitable.

However there are some exemptions and certain groups are eligible for a discount.

New buildings – if you have built a brand spanking new home you don’t have to pay taxe foncière for the first two years, provided you have registered your new-build with the tax authority within 90 days of completion. There are also discounts available if you have done works on the energy efficiency of your home.

Discounts – there are discounted rates available if you are over 75, have a registered disability or are in receipt of certain types of benefits.

Landlords – if you are renting out your property and you are unable to find a tenant, or are carrying out major works that means the property is uninhabitable, you may be eligible for a discount. The property must have been vacant for at least three months and if you are doing building works you will need to provide proof.

For more on how to claim a discount, head to the French tax office’s website here.

Is that the end of the tax demands?

No, you may also be paying the taxe d’habitation. As mentioned above, this is in the process of being phased out, but certain areas will still be billed for it this year. And if your property is a second home you will continue paying the tax indefinitely. Bills for this generally arrive in the autumn.

And in some areas your taxe foncière bill will also include a waste collection charge or taxe d’enlèvement des ordures ménagères (TEOM) set by your commune. The exemptions mentioned above do not usually apply to this charge.

French vocab

Taxe foncière – property tax

Taxe d’habitation – household tax

Avis d’imposition – tax demand

Valeur locative – rentable value

Logements neufs – new-build homes

Base d’imposition – tax rate

Propriété bâtie – land occupied with a home or business building

Propriété non-bâtie – land with no building on it. This includes an empty plot of land, mines or marshes

Taxe d’enlèvement des ordures ménagères – waste collection charge

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For members

FRENCH BUREAUCRACY

Everything you need to know about your vital French ‘dossier’

It's a crucial part of life and an incomplete one can bring about a whole world of pain - here's what you need to know about your French dossier.

Everything you need to know about your vital French 'dossier'

The French word un dossier simply means a file – either in the physical sense of a plastic or cardboard item that holds documents together or the sense of a collection of documents. You might also hear civil servants use dossier to refer to the responsibilities they hold, as in English we might say their ‘brief’. 

But by far the most important use of dossier, particularly to foreigners in France, is its use to indicate the collection of documents that you must put together in order to complete vital administrative tasks, from registering in the health system to finding somewhere to live.

When you begin a new administrative process, you will need to put together a collection of documents in order to make your application. Exactly what you need varies depending on the process, but almost all dossiers will include;

  • Proof of ID – passport, birth certificate or residency card. If a birth certificate is required check carefully exactly what type of certificate is being asked for (and don’t freak out if they’re asking for a birth certificate no more than three months old, it doesn’t mean you have to be born again).

Birth certificate: Why you need it in France and how to request one

  • Proof of address – utility bills are usually the best, if you’re on paperless billing you can log into your online account with your power supplier and download an Attetstation de contrat which has your name and address on it and also acts as proof of address
  • Proof of financial means – depending on the process you might have to show proof of your income/financial means. This can include things like your last three months payslips or your most recent tax return. If you’re house-hunting you might be asked for your last three quittances de loyer – these are rent receipts and prove that you have been paying your rent on time. Landlords are legally obliged to provide these if you ask, but if you can’t find them or it’s a problem you can also ask your landlord to provide an attestatation de bon paiment – a certificate stating that you pay what you owe on time.

Paper v online

The traditional dossier is a bulging file full of papers, but increasingly administrative processes are moving online, so you may be able to simply upload the required documents instead of printing them all out. 

If you have to send physical copies of documents by mail, make sure you send them by lettre recommandée (registered mail), not only does it keep your precious documents safe, but some offices will only accept documents that arrive this way. 

If you’re able to send your dossier online, pay careful attention to the format specified for documents – usually documents like rental contracts or work contracts will be in Pdf format while for documents like a passport or residency card a jpeg (such as a photo taken on your phone) will suffice. If you’re sending photos of ID cards, residency cards or similar make sure you upload photos of both sides of the card.

If you need scanned documents there is no need to buy an expensive scanner – there are now numerous free phone apps that will do the job and allow you to photograph the documents with your phone’s camera and convert them to Pdf files.

Some French government sites are a little clunky and won’t accept large files – if you get an error message telling you that the file you are uploading is too big, you can resize it using a free online photo resizing tool. 

Payment

If the process requires payment (eg changing address on certain types of residency card or applying for citizenship) you may be asked for a timbre fiscale – find out how they work here

House-hunting

If you are looking for a property to rent you will need to compile a dossier and if you’re in one of the big cities – especially Paris – landlords or agencies usually won’t even grant you a viewing without seeing your dossier first, so it’s always best to compile this before you start scanning property adverts.

The government has put together a tool called Dossier Facile which allows you to upload all your house-hunting documents to a single site, have them checked and verified and then gives you a link to give to landlords and agencies, which makes the process a little simpler.

Find a full explanation of how it works here.

Attestations

For foreigners, especially new arrivals, it’s often a problem getting together all the documents required. It’s worth knowing that if you don’t have everything you need, you can sometimes substitute documents for an attestation sur l’honneur, which is a sworn statement. 

How to write a French attestation sur l’honneur

This is a legally valid document, with penalties for submitting a false one, and needs to be in French and written in a certain format – the French government website provides a template for the attestation.

Vocab

Déposer un dossier – submit your file

Pièce d’identitie – proof of ID eg passport, residency card

Acte de naissance – birth certificate. 

Copie intégral – a copy of the document such as a photocopy or scan

Extrait – a new version of the document, reissued by the issuing authority

Sans/ avec filiation – for birth certificates it might be specified that you need one avec filiation, which means it includes your parents’ details. Some countries issue as standard short-form birth certificates that don’t include this, so you will need to request a longer version of the certificate

Justificatif de domicile – proof of address eg recent utility bills. If you don’t have any bills in your name you can ask the person who either owns the property or pays the rent to write an attestation de domicile stating that you live there

Justificatif de situation professionnelle – proof of your work status eg a work contract – either a CDI (permenant contract) or CDD (short-term contract)

Justificatif de ressources – proof of financial means, such as your last three months payslips (employers are legally obliged to provide these), other proof of income or proof of pension payments or evidence of savings.

Avis d’imposition – tax return. Some processes ask for this separately, for others it can be used as proof of resources – this is not a copy of the declaration that you make, but the receipt you get back from the tax office laying out your income and any payments that are required. If you declare your taxes online in France, you can download a copy of this document from the tax website. 

Quittance de loyer – rent receipts

Attestation de bon paiment – a document from your landlord stating that you pay your rent on time

Un garant – for some processes, particularly house-hunting, you might need a financial guarantor. This can be tricky for foreigners since it has to be someone you know reasonably well, but that person must also be living (and sometimes working) in France, and they will also need to provide all the above documents. If you’re struggling to find an acceptable guarantor, there are online services that will provide a guarantor (for a fee).

En cours de traitement – this means that your dossier has been received and is in the process of being evaluated. Depending on the process this stage can take anywhere between hours, months or even years (in the case of citizenship applications).

RDV – the shortened version of rendez-vous, this is an appointment. Certain processes require you to first submit your dossier and then attend an in-person appointment.

Votre dossier est incomplet – bad news, you are missing one or more crucial documents and your application will not proceed any further until you have remedied this.

Votre dossier est validé – your dossier has been approved. Time to pop the Champagne!

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