Between 2018 and 2022, Emmanuel Macron’s government is phasing out the taxe d’habitation for 80% of French residents, leaving those with an annual taxable revenue in excess of €20,000 per person to foot the bill.
How will this affect you?
The French government has now given more detail on its intentions to phase out the taxe d’habitation for 80% of French residents, applicable to principal residency homes only.
Couples with an income of less than €44,211 – 100% exoneration
Single individuals with an income of less than €27,761 – 100% exoneration.
For higher incomes, exoneration will be gradual :
-30% in 2021
-65% in 2022
-100% in 2023
Macron has promised that the state will compensate local councils for the loss of council tax.
TAXE D’HABITATION – TENANTS AND OWNERS TAX 2019 (see above for phased exonerations)
What Is It?
This is a resident tax paid on local property, similar to the council tax in the UK. It’s used by your local commune to provide local services and council facilities i.e. schools, crèches and paid by owners and tenants.
Who is liable?
If you rent a property in France you would be liable to pay this tax. Who pays is determined by where you live on 1st January of the calendar year. Therefore if you move house on the 2nd January, you would be liable for the tax d’habitation for the whole the year even if you don’t live in the property. You would not however pay the tax in the new property you just moved in to.
Tax d’habitation is is liable by the ‘tenant’ who lives in the property as of 1st January. The owner should inform the tax office of their tenants so that the tax d’habitation is sent directly to the new tenant. Otherwise, the owner would be responsible for the non payment of the tax. If there is no tenant of course, the owner is responsible.
There are some exonerations and exemptions but that would depend on various criteria, such as age (certain exonerations for retirees), disability & income. Exonerations are only applicable to principal residency homes and the reductions are usually given automatically.
In order to pay this tax, the property must be classed as habitable i.e. have sufficient furniture, electricity and water etc. If you don’t live there all year round, you would still be liable for this tax. If you think you may have missed out on some reductions, pop into your local tax office to discuss in more detail. They are very helpful.
NOTE: If you are renting a property (but are not the owner) you are liable to pay the part of the ‘ordures ménagers’ i.e. bin collection part of the Tax Foncière. This is often built into your monthly charges.
How is it calculated?
This is always the big question and quite frankly it’s quite complicated. It is calculated according to ‘la valeur locative cadastrale’ or VLC – Cadastral Rental Value of the property and its annexes.
This value is ‘supposed’ to represent the annual rental income you could expect from the property. For primary residences, certain rebates are applied to this value, which gives the ‘valeur locative nette’ or Net Rental Value. Wish you’d never asked?
The amount of your tax billed is the Net Rental Value multiplied by the tax rates voted by your local authorities which vary greatly from commune to commune.
Before buying a property it would be wise to ask your estate agent or current owner this cost.
Note: On the same bill, you will pay your ‘contribution à l’audivisuel public’ – TV License. In 2021 this is 138 euros. You can opt out of this if you have no TV by ticking the box on the first page of your annual tax declaration.
When is it paid?
You will receive your tax d’habitation bill in October and this tax is due to be paid on the 15th November for primary residents. For secondary homes this would be for 15th December. The date is written on your tax bill. If you pay online, these date are pushed out, see payment section below.