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Local taxes, energy audit: Four updates for property owners in France

We also look at the story of a French island claiming nearly €500,000 in unpaid taxes from Airbnb and a challenge to overturn rent controls in Paris

This week we cover the rent control laws in Paris, an overdue tourist tax bill, a new decree on energy audits and a series of increasing local taxes Pic: Ralf Liebhold, Grommik, Hadrian, Marc Bruxelle / Shutterstock

Local property taxes on the rise in France

Several local property taxes are set to increase or have increased recently, adding to the rising cost of living in France.

One such tax is the household waste tax, called the taxe d'enlèvement des ordures ménagères (TEOM), which, where it is levied, is combined with bills for property owner’s tax, taxe foncière (some areas have an alternative tax called REOM). Owners cannot reclaim the latter from tenants, but they can reclaim the waste tax.

It is levied by communes or intercommunal bodies and costs €130 per person per year on average and more than €500 for a family of four, according to Nicolas Garnier from the waste, energy and heat network management association Amorce. 

This year 77% of local authorities planned to increase the TEOM by at least 5%, according to a recent survey from Amorce in which around 60 councils/intercommunal bodies participated. Nearly half of them (49%), plan to increase it by 10%. 

This increase is in part explained by rising energy and fuel costs, with collectivités having to pay more to fuel bin lorries.

Read more: Cost of home DIY projects rises due to shortages: should you delay?

Read more: Why is heating oil not included in the French state’s fuel discount?

The so-called ‘garden shed tax’ has also risen this year, linked to rising construction costs.

This one-off tax, officially taxe d’aménagement, is paid on most constructions requiring authorisation from the council, whether formal planning permission or just prior declaration. 

It is known as the garden shed tax because, unlike most property taxes, it is also payable on simple sheds, as long as they have a ground surface area of at least five square metres and a ceiling height of at least 1.8m.

Compared to last year, the tax has risen around 7%, whereas rises in the previous two years were limited to 1.1% and 0.7%. 

This hike is said to be linked to the cost of construction, which is the main factor in the formulas used.

Read more: France’s ‘garden shed tax’ is up 7% on last year

Read more: Must I pay France’s ‘garden shed’ tax on a replacement structure?

Finally, the Gemapi tax, which is paid to local authorities for flood prevention costs, is also rising for many taxpayers in those areas where local councils have brought in this tax.

In several parts of France, it has risen sharply. In Toulon (Provence-Alpes-Côte d'Azur), it nearly doubled between 2020 and 2021. In the same time, it tripled in the department of Lot-et-Garonne and went up fivefold in the Aix-Marseille-Provence zone, figures from the homeowners' union UNPI show

Another factor is that the responsibility to pay this tax is now almost entirely on landlords, as France gradually phases out its residents’ tax, the taxe d’habitation, for people’s main homes. 

Where tenants are still eligible to pay taxe d’habitation, their tenants are eligible to pay part of the Gemapi tax. But once the taxe d’habitation is fully phased out, landlords will have to pay all of it. 

France has gradually been phasing out its taxe d’habitation residents’ tax since 2018, and only 20% of the highest-income households still had to pay it last year.

By 2023, no one will pay taxe d’habitation on their main home. Second-home owners are not included in this and will continue to pay the tax.

Read more: French taxe d’habitation: Who is fully exempt in 2022?

Read more: Steep rises for many French taxe foncière bills amid high inflation

Energy audit for sellers of G and F-rated properties from September 1

It will soon be necessary for people in France looking to sell properties that have an energy efficiency rating of F or G – meaning poor efficiency – to organise an energy audit of their property in advance of selling. 

The new rule will come into effect from September 1 this year, a decree published May 5 states. The requirement will be gradually expanded to encompass properties with energy ratings of E and D over the next 12 years. 

This measure was initially due to enter into force on January 1 but was pushed back due to unreadiness in the sector. 

In France, properties are rated on their energy efficiency based on a scale called the Diagnostic de performance énergétique (DPE). 

The DPE uses a graded rating scheme – from A to G – to indicate how energy-efficient a property is, with A the best and G the worst. 

It takes into account the energy consumption and greenhouse gas emission rates of a home. 

From September 1, sellers must get an audit that will provide a precise outline of the work needed to renovate the house so that it can achieve a rating of at least B on the DPE.  

The audit gives a much more detailed evaluation of a property’s energy efficiency than the DPE. 

In addition to assessing hat renovation must be carried out, the audit must also provide an estimate of the cost of the work and indicate the public aid available to finance it.

For homeowners, the audit can cost anywhere between €500 and €1,000. It must be carried out by a certified professional - it is recommended to look for those who have the RGE Etudes certification. 

It is also possible to get government aid to help finance the cost of ths audit. The amount you receive will depend on your income, but can be up to €500. 

You can find out more about this aid through the government website France Rénov’.

You can also read our article explaining France Rénov’ here: Explained: How to apply for a renovation grant for your French home

This service can also help you to find professionals who are certified to carry out the energy audit. See more information here

The requirement for sellers to get an energy audit will be gradually expanded to include higher performing properties

From January 1, 2025, it will be required for properties with a DPE rating of E. 

From January 1, 2034, it will be required for properties with a DPE rating of D. 

Challenge to scrap ‘rent controls’ in Paris rejected

A challenge by two unions of landlords to scrap rent controls (encadrement des loyers) in Paris has been rejected by the Conseil d'État, the highest administrative court in France. 

The court gave its verdict on Tuesday (May 10). 

In France, a system of rent controls applies to Paris, Lille and Lyon. Where it is in place, real estate professionals must mention in their advertisements the maximum rent allowed for each property and cannot legally then charge more. 

The two unions wanted this rule overturned for “excess of power”, but were refused. 

The deputy mayor of Paris in charge of housing, Ian Brossat, welcomed the decision on Twitter, which he hailed as a "victory"

“This is good news for tenants who are fed up with high rents. We will work to improve enforcement [of this rule],” he said. 

In more than a quarter of rented properties in Paris, rent prices exceeded the maximum permitted amount, a 2020 study from the Observatoire des loyers de l'agglomération parisienne shows. 

Read more: MAPS: How rent prices vary between France’s major cities

French island vs Airbnb in tourist tax dispute

Authorities of an island off the west coast of France are seeking €468,000 in unpaid tourist taxes from holiday accommodation rental platform Airbnb. 

In France, properties that are rented out for short stays to tourists are, in certain areas of the country, subject to a yearly tourist tax called the taxe de séjour

The Île d'Oléron (Charente-Maritime), which is just south of La Rochelle, imposes this tax. 

Booking platform Airbnb is supposed to collect the tax from its users who rent out their properties on the platform and then pay the tax back to local authorities. 

But the Communauté de communes (CC) of the Île d'Oléron claims that Airbnb is still due €468,000 for 2020 and 2021. 

The total sum of the tax that Airbnb is due has only recently been revealed by the booking platform, Jonathan Bellaïche, a lawyer representing the CC, said. 

“This is a positive first step that will hopefully lead to the payment of the tourist tax,” Mr Bellaïche stated. 

Airbnb has responded in a statement, writing: “We are examining the anomalies brought to our attention and are working with Oléron to resolve the problem.”

It said that it “pays the tourist tax in more than 29,000 communes across France”, which generated “more than €93million in 2021 alone”. 

Read more: Airbnb and tax, €1 house: Four updates for property owners in France

Read more: How do we declare letting income on our French second home?

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