Rising Property Taxes in France: What Homeowners Need to Know
As the year comes to an end, property owners across France are receiving their annual taxe foncière bills, a tax levied on all property owners, whether they inhabit the property as a primary residence, utilize it as a second home, or rent it out. Homeowners may also find themselves facing a secondary bill for taxe d'habitation, which predominantly impacts second home owners. Notably, many of these tax bills are expected to increase compared to last year.
Understanding Taxe Foncière
The taxe foncière is applicable to all property owners and has seen a general increase of three percent across France this year. However, local authorities retain the power to impose additional increments, with a cap of 60 percent on the tax. While some communes have chosen to increase their bills, others opted for no changes after hikes last year.
Apart from local authority decisions, several factors can influence the rise in your property tax bill. If you've undertaken renovations, such as extensions or the installation of a swimming pool, the rentable value of your property may have risen, resulting in a higher tax bill. Additionally, the 2023 requirement for property owners to submit an updated tax declaration could reveal discrepancies in the tax office’s records. This adjustment may lead to significant jumps in tax bills if previous values were based on outdated or incorrect information.
If you believe your tax bill has been miscalculated, it’s essential to understand your options for challenge. While you cannot contest the local authority's tax rate, you can dispute the rentable value of your property. The 'valeur locative' printed on your bill, representing what rent you could expect, is the basis for this calculation. To contest an inaccurate assessment, verify the details in your online tax account. Ensure the property information, including size and number of rooms, is correct. If it’s incorrect, take steps to rectify it with your local tax office, either by phone or in person, with necessary documentation like property deeds.
Dealing with Taxe d'Habitation Changes
The taxe d'habitation has undergone significant changes since 2019, with the tax gradually phased out for owner-occupiers and tenants, now affecting mainly second home owners. If you receive a taxe d'habitation bill for what should be your main residence, it may indicate that the tax office has incorrect details on file. Similar to taxe foncière, the tax amount is contingent on the property’s value and recent changes or renovations. Local authorities can impose an up to 60 percent surcharge in regions facing housing shortages, exacerbating potential tax bills.
Homeowners should note that the calculations for both taxes are intricate, as they hinge on the rentable value and local commune-set rates. According to Moneyvox, in 2022, the average annual taxe foncière bill was €895 (or approximately €74 monthly) with considerable regional disparities—Essonne having the highest average bill at €1,351 and Indre the lowest at €565. Taxe d'habitation averaged €772 in the same year.
Conclusion
As property taxes continue to rise, understanding the details about taxe foncière and taxe d'habitation—how they’re calculated, the potential for increases, and the recourse available to homeowners to challenge unjust bills—becomes essential. Owners should take proactive steps to ensure the accuracy of their property tax declaration and be prepared to discuss concerns with their local tax office. Awareness and diligence can mitigate the unexpected financial burden that these taxes can impose.
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