Part One: Taxe d’habitation
Expat homeowners: are you confused about the French local property tax system?
Are you a non-resident homeowner in France? Perhaps you are retiring to the South, or are considering acquiring a chalet in the French Alps to rent out. Buying and managing a property in any country can prove to be a hassle at times, particularly when it comes to paying the correct taxation rates with regards to your needs and requirements from the investment. Our team of experts often receive questions from expat homeowners in France concerning the difference between two of France’s main local property taxes: taxe d’habitation and taxe foncière. In Part One of our handy summary below, we explain taxe d’habitation.
Taxe d’habitation is an annual residence tax due by the occupant of a property before the 1st of January every year. The taxation principle is that even if you are not physically present in the property on this date, the tax is nevertheless due if the property is capable of accommodation (i.e. it’s furnished and has access to utilities). As a result, taxe d’habitation is due regardless of how much time you actually spend in your property, as long as it is habitable. If you rent out your property on annual basis, this tax is payable by the tenant.
How is it calculated? Essentially, the theoretical rental value of your property (the valeur locative brute) is multiplied by a ratio defined by the commune your property is based in to make a taxation rate. This ratio is formulated based on the relative size and condition of your property in comparison to the rest of the properties in your commune, taking into account the margin the local authorities need to make. Rates are also affected by whether your home in France is your main home or a second home. You may be entitled to a reduction on your taxe d’habitation rate based on your family or financial situation – get in touch with our advisors today using the ‘contact’ field to the right to find out more.
We are used to working with the French authorities on this complex issue of French taxation on behalf of expatriate and non-resident homeowners, and would be more than happy to deal with any issues you may have encountered on this subject. Stay tuned for our next post, where we will discuss Taxe foncière.
If you are perplexed by taxe d’habitation and are unsure about how to proceed, please contact us via telephone +33 (0) 1 53 93 94 20 or [email protected].