Receiving a tax bill filled with unfamiliar terms can be confusing, especially when it concerns France’s taxe d’habitation. This local tax historically applied to anyone occupying a property in France, whether owner or tenant, and helped fund essential local services such as schools, public transportation, infrastructure, and waste management. The tax is calculated based on the property’s valeur locative cadastrale (assessed rental value), adjusted annually and multiplied by a rate set by the local commune.

Key Reforms

As of January 1, 2023, the taxe d’habitation has been completely abolished for primary residences. However, it still applies to secondary homes and vacant properties. This reform significantly changed tax obligations for property owners in France.

Understanding who must still pay the tax, how it is calculated, and possible exemptions is crucial for compliance.

Who Pays the Tax?

• Primary Residence: The main home you live in full-time is now exempt from taxe d’habitation.

• Secondary Residence (Second Home): Properties used for vacations or personal use are still subject to taxe d’habitation.

• Vacant Properties: Owners of unoccupied properties must also pay the tax, sometimes at higher rates.

• Non-Residents: Those owning property in France but living abroad are taxed on their French properties, not on worldwide income.

How the Tax is Calculated

The tax is based on the valeur locative cadastrale (VLC), which estimates the property’s potential annual rental income. Key factors include:

1. Surface area of the property.

2. Weighted area (surface pondérée): Adjustments reflecting room importance and quality.

3. Reference rent per m² based on historical local market rates.

4. Calculation: VLC = Weighted Area × Reference Rent per m².

Local communes set tax rates, which vary widely. Some communes, particularly in high-demand areas known as zones tendues, can apply surcharges ranging from 5% to 60% on secondary homes. In 2024, the average surcharge is around 41%.

Declaration and Payment

Property owners must declare their properties through the “Gérer mes biens immobiliers” section on impots.gouv.fr. Key points:

• Declare occupancy status: primary, secondary, or vacant property.

• For non-owner occupants, provide identity and occupancy period as of January 1.

• Review and validate the declaration; a PDF copy can be saved for records.

Payment deadlines:

• Tax bills are typically sent in autumn.

• Online payment deadlines are usually mid-December.

• Payments over €300 must be made online; smaller amounts can be paid via cheque, bank transfer, or in person.

• Monthly installments are available if enrolled by June 30.

• Late payments incur a 10% penalty.

Common Pitfalls to Avoid

1. Misclassifying your residence: Only one primary residence is recognized.

2. Ignoring local tax rates: Communes can differ significantly.

3. Missing deadlines: Late or missed payments result in penalties and interest.

FAQ

Q: What if I don’t pay my residency tax?
Unpaid taxe d’habitation can lead to penalties, interest, and potential legal action.

Q: Can I appeal my tax amount?
Yes, appeals can be filed with the tax authorities if you believe the assessment is incorrect.

Q: How is the valeur locative cadastrale determined?
It’s based on property size, quality, and reference rental values. Local tax offices or property tax statements provide this information.

Conclusion

Since 2023, primary residences are exempt from taxe d’habitation, but secondary homes and vacant propertiesremain taxable. The tax is calculated based on the cadastral rental value and local rates, including possible surcharges in high-demand areas. Timely declaration and payment are essential to avoid penalties.

For detailed guidance and to manage your real estate tax declarations, visit impots.gouv.fr.