Part Two: Taxe foncière
Expat homeowners: are you confused about the French local property tax system?
Our team of experts often receives questions from expat homeowners in France on the difference between two of France’s main local property taxes: taxe d’habitation and taxe foncière. In Part Two of our two-part summary, we explain taxe foncière.
The subtle difference in meaning between taxe d’habitation and taxe foncière can’t be captured though terms non-residents may be more used to such as ‘property tax’ or indeed ‘council tax’; more accurately if we take taxe d’habitation to mean ‘residence tax’, taxe foncière equates to ‘property ownership tax’.
Taxe foncière is imposed on homeowners of French property, regardless of whether they live in the property (or not) or whether they rent it out. The tax is applicable not only to residential property, but also to professional and commercial spaces, as well as land, albeit at a reduced rate. It is payable by the person who owns the property (as opposed to the person living in the property) as of the 1st of January of each year, and it forms a contribution towards councils on a local, departmental and regional level.
Calculation of the tax is broadly similar to that of taxe d’habitation – the theoretical rental value (valeur locative brute) of the property is halved to take into consideration the property’s running costs. A taux d’imposition (tax rate) – set by the commune in which your property is situated and determined based on the margin the local council needs to make – is then applied to this value to create the tax payable. Additional rates are applied to this base figure according to whether the property is a first or second home, and homes with a particularly high theoretical rental value are susceptible to a further rate known as a prélèvement pour base élevée.
Expats should also be aware that some communes levy a household waste-removal tax known as the TEOM (taxe d’enlèvement des ordures ménagères), found on the same tax demand distributed every third quarter as taxe foncière.
You may be entitled to a number of exemptions or tax relief schemes when it comes to this intricate field of French legislation – get in touch with our advisors today using to the ‘contact’ field to the right to ensure you are up to date with the latest rulings governing French local property taxation.
If you are perplexed by taxe foncière and are unsure about how to proceed, please contact us via telephone +33 (0) 1 53 93 94 20 or firstname.lastname@example.org.