One of France’s main local property taxes – the taxe d’habitation – is no longer levied on any main homes in France as of this year.
The tax is now only levied on ‘second’ homes, which refers to homes in France owned by people whose main residency is in another country, or homes used by residents of France whose designated principal residence is elsewhere in the country.
As a result, the tax is now also sometimes referred to as taxe d’habitation sur les résidences secondaires.
It is distinct from the other main local tax, taxe foncière, which property owners pay each year regardless of the status of the property (although exemptions do exist).
What is the taxe d’habitation?
Taxe d’habitation is an annual property tax levied on furnished second homes.
It was previously levied on all homes, however from 2018, it was gradually phased out as a tax on main homes. In 2023, it only applies to second homes.
The taxe d’habitation is levied by local authorities. It is one of the few remaining sources of locally collected as opposed to government-allocated, funds for communes.
Typically, the money raised helps to pay for essential local services.
Local authorities have the power to set the rate of the tax, which in turn can cause significant differences in bills across the country.
Who must pay the taxe d’habitation?
The taxe d’habitation is levied on furnished second homes along with their associated dependent structures, such as garages and outhouses.
Note that by ‘second home’, the French tax authorities mean a property that is not your main residence, and not just simply a second property owned in France.
If you own a second home that you let out to rent as someone else’s home, then it is considered the primary residence of the tenant/st and you will not pay taxe d’habitation for it.
This only applies to properties that are rented on a long term basis and would not usually include a second home used as an Airbnb, for example.
However, an exemption is possible for properties used and fitted out exclusively for use for short-term holiday rental and where the owner pays the cotisation foncière des entreprises (CFE) tax.
If you have your main home in another country, and notably are a tax resident of that country, then any home you have in France will be considered a ‘second’ home by France even if it is the only one you own in the country.
If you own a property in France that is not your main residence on January 1 of a given year, you will pay that year’s taxe d’habitation for the property.
This also applies to people who rent their main home and own a second home.
How is the tax calculated?
The tax is calculated using a property’s valeur locative cadastrale (VLC) – the amount that the property could in theory be rented out for. This rises each year, in line with adjustments to the consumer price index in France.
Local authorities set a rate of taxation applied to this VLC, which is used to calculate the final bill. Since this rate can vary significantly between communes, there are no definitive figures for it. The final bill varies between communes and the size and comfort of the home.
There is nothing to declare to officials in relation to taxe d’habitation – if you have to pay the tax, you will be sent a statement with all the information required (either through your personal space on the tax site or via a letter).
In 2023, some people were mistakenly sent taxe d’habitation statements because tax officials held two addresses in their name.
Changes to the property such as renovations do not affect the rate of the tax (as they may do for taxe foncière).
If the property is located in an area with a shortage of housing, known as a zone tendue, the local authority can impose an additional 5% to 60% surcharge on top of the tax.
Thousands of additional communes are now able to levy this surcharge after updates made to the list in 2023.
The new communes affected fall largely in coastal areas in the south or west, as well as mountainous areas of France. A lot of them are popular tourist destinations.
However, the surcharge must be approved by local authorities by a vote first, meaning not all communes that can apply the surcharge necessarily will.
You can read more about the change – as well as find a list of communes affected – here.
Local authorities can also impose a separate surcharge for unfurnished homes (homes that have not been lived in for at least two years from January 1 of that year).
Many communes voted to levy both surcharges for 2024 tax, however these must be voted on each year so the exact list of communes levying each surcharge will change each year.
When is the tax paid?
An avis (statement, or bill) will appear in your personal space on the French tax site in the final quarter of the year. It is also sent in paper form unless you opted out of this.
The exact dates change annually. In 2023, the first bills were available online on November 7.
The avis will indicate how much you have to pay and by when.
Depending on whether you pay the tax in one lump sum or in instalments, the bill may arrive later.
There are several ways to pay, including via a direct online payment, which you can do in your personal personal space on the tax site, using the impots.gouv app, a bank transfer, a cheque or payment at certain tabacs.
Payment in instalments is also possible, up to a certain date.
You can make the request to pay next year’s tax in instalments via your personal space on the French tax site. If you do this before December 15, next year’s payments will begin on January 15.
Once you ask to switch to paying in instalments, all future taxe d’habitation bills will be paid this way and the money will come directly out of your bank account.
Finally, there is the prélèvement à l’échéance option, by which you set up a direct debit to pay your tax in one go. You can still opt for this up to November 30 this year. If you do so, the amount will be taken only on December 27.
Are there any exemptions?
No reductions based on financial conditions are possible, although these used to apply when the tax was levied on both main and secondary residences. No age-based exemptions apply either.
Those who only own a holiday home which they only occasionally visit are also not exempt from the tax.
In general, only one exemption exists..
If you have to leave your home to move to a retirement home or other long-term care facility (and thus leave the property vacant and in theory a ‘secondary residence’) because of age or illness, you do not have to pay the tax.
There are also specific exemptions from the surcharge for homes in zone tendues areas mentioned above.
These exemptions include:
Your professional activity being close to your second home and requiring you to live there rather than in your main home (where other family members may live)
The residence is uninhabitable for reasons beyond your control. For example, work is needed to make the home decently habitable
You can also get an exemption from the surcharge if you moved into a care home or long-term care facility, as you can for the main tax.
In all cases, you can apply for the exemption through your personal space on the French tax site (under the Nous contacter button to message the authorities), or at your local centre des Finances Publiques (tax office). You can also send a written letter to your closest one.
In certain areas classed as zones de revitalisation rurales (rural revitalisation zones, or ZRR), chambres d’hôtes and other furnished tourist accommodation lets (meublés de tourisme) are exempt from the tax.
To apply for this exemption, you need to send form N1205-GD to your local tax office by December 31 of the preceding year.