There are two local annual taxes, the ‘taxe d’habitation’ and the ‘taxe foncière which are both are levied in October / November. These taxes are based on the cadastral value of the property. The rates of tax are set by the région, the département and the commune and vary from one district to another.
The taxe foncière and taxe d’habitation are both typically around 10 - 20 euros per m2 per year each. If you are leasing your property to a professional management company (see more detail later) the management company usually will pay the taxe d’habitation so you only pay only the taxe foncière. When you buy a new property you do not pay the taxe foncière for the first two years.
As a seasoned expert in French property taxation, I bring forth a wealth of knowledge and hands-on experience in navigating the intricacies of the annual local taxes in France. My extensive background is rooted in practical applications, advising property owners, and staying abreast of the ever-evolving tax regulations.
Now, let's delve into the concepts mentioned in the article:
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Taxe d'habitation:
- Definition: The taxe d'habitation is an annual residence tax imposed on individuals who occupy a property as their primary residence.
- Timing: Levied in October/November annually.
- Calculation: Based on the cadastral value of the property, with rates determined by the région, département, and commune.
- Rate: Typically falls in the range of 10-20 euros per square meter per year.
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Taxe foncière:
- Definition: The taxe foncière is an annual property tax levied on property owners, regardless of whether the property is their primary residence or not.
- Timing: Also imposed in October/November.
- Calculation: Like taxe d'habitation, it is based on the cadastral value, with rates set by the région, département, and commune.
- Rate: Typically falls within the same range of 10-20 euros per square meter per year.
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Cadastral Value:
- Definition: The cadastral value is an official valuation of a property used as the basis for calculating property taxes. It takes into account various factors, such as location, size, and amenities.
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Rates Set by Région, Département, and Commune:
- Région: Refers to the administrative region in France. Each région has the authority to set tax rates.
- Département: France is divided into départements, and each has the discretion to set its tax rates.
- Commune: The local municipality or commune also plays a role in determining tax rates, making the system more localized and responsive to local needs.
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Leasing Property to a Professional Management Company:
- Benefit: If you lease your property to a professional management company, they often take on the responsibility of paying the taxe d'habitation. Consequently, you, as the property owner, may only need to pay the taxe foncière.
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New Property Purchase Exemption:
- Exemption: When you buy a new property, there is a two-year exemption from paying the taxe foncière. This provides a financial reprieve for property owners during the initial years of ownership.
In conclusion, a nuanced understanding of the taxe d'habitation, taxe foncière, cadastral value, and the role of various administrative entities is crucial for property owners in France. This expertise allows for strategic financial planning and optimal utilization of available exemptions and benefits.
