The taxe d’habitation or French residence tax is payable every year by the person (or persons) occupying the property on 1st January. Even if there is no one there on that date, if the tax authority deems that your property is ‘capable of being occupied’ you will be taxed. This means that regardless of how much (or how little) time you spend at your French home you will still have to pay the taxe d’habitation. Whether or not your property is furnished makes no difference. Your television license fee (or redevance audiovisuelle), which costs 116 € a year, is charged in the same way.
There are however certain circumstances under which you will not have to pay this tax. If you move into your property after 1st January you will not be liable for the taxe d’habitation payable that year (the previous tenant will be unless you have made a private agreement with them). Similarly you will not have to pay this tax if you let out your property as it will be paid by your tenants instead. You may also be exempt if you have tried without success to let your property (though you must have evidence to support your claim) or if your property is a holiday let – that is to say a chambre d’hote or a classified gîte (contact your local mairie for more information about this). Finally, if you are aged over 60, are a widower or are registered disabled (ie incapable of gainful employment) you will not be required to pay this tax.
The way in which this taxe d’habitation is calculated is rather complex but is essentially based on the notional rent a property might achieve (taking into account its condition, size and location) rather than the actual rent payable. As the formula applied to this notional rent varies according to how much income the local authority needs to raise, the amount you pay in tax will be different in different places although it will, generally speaking, be higher for a property in a town than for a comparable property in the countryside. You can find out the notional rental value of your French property by contacting the local Centre des Impôts Fonciers (Service de Cadastre).
The taxe fonciere or French wealth tax is payable by the owner of the property rather than the occupier. All types of property are subject to this tax (residential, commercial, professional and industrial property) as is land.
There are exemptions, however. The taxe d’habitation is not payable by those aged over 75, the disabled and recipients of the “minimum vieillesse” (a pension for elderly people with low incomes), with those aged between 60 and 75 benefitting from a reduction of €100 or more (these personal exemptions however are only granted if the property is your principal residence). Other exemptions include agricultural buildings, land with new woodland planting, properties built prior to 1989 where major energy conservation measures have been undertaken and residential properties which have been placed on the market but remain unsold (although, once again, the property owner must have evidence as to their efforts to sell). New builds, extensions and rural conversions are also subject to a two-year exemption.
The taxe fonciere is determined in much the same way as the taxe d’habitation (and again, is usually higher in towns). It is paid annually with tax invoices (Avis d’imposition taxe foncière) normally sent out during the third quarter of the year. Those buying/selling properties during the tax year will not however be left out of pocket with the parties involved usually agreeing to share the cost of this tax (if this is the case, ensure that it is mentioned in the relevant sale and purchase agreements).
The taxe fonciere is often accompanied by the taxe d’enlevement des ordures menageres, the rubbish collection tax (some local councils charge separately for this service whilst other fund rubbish collection from the general budget).