Local and Property taxes

Local property taxes

Local property taxes are a significant and ongoing cost for homeowners in France, particularly for those buying second homes or relocating from abroad. Bills can vary widely from one commune to another and even between similar properties on the same street, depending on local council policy and how a property is assessed.

For most homeowners, paperwork is minimal. Bills are available in your personal space on the French tax website impots.gouv.fr, although paper bills can still be requested. Many people opt to pay by direct debit in monthly installments (mensualisation).

Local property taxes are assessed according to the situation on January 1 of the French tax (calendar) year and are described as ‘local’ because they help fund municipal and intercommunal services.

The main local property taxes

Taxe foncière

The principal tax paid by almost all property owners is taxe foncière (real estate tax).

The most common version applies to built properties (buildings and their immediate dependencies such as gardens, garages, and outbuildings). A separate taxe foncière exists for undeveloped land.

Taxe foncière is always paid by the owner, even if the property is rented out. For those paying in a single installment, the deadline is generally October 15 for traditional payment methods and October 20 for online payments. 

Many owners instead pay by ten monthly direct debits from January to October, based on the previous year’s bill, with adjustments made at the end of the year if needed.

The average bill in France is a little over €1,000 but amounts can vary considerably, so buyers are advised to ask the seller or estate agent how much the last taxe foncière bill came to before committing to a purchase.

Taxe d’habitation

Taxe d’habitation (residential tax) used to be paid by most households but has been abolished for main residences since 2023. It now applies only to second homes.

Taxe d’habitation is not payable by owner-occupiers of main homes, nor on properties rented out long term as someone else’s main residence. However, it may apply to second homes used for holiday lets, particularly if owners retain the ability to use the property themselves when it is not let out.

Communes in areas facing housing pressure, including many coastal and tourist areas, may apply a surtax on top of taxe d’habitation of between 5% and 60%. Roughly half of the communes eligible to do so have opted for this.

Who pays, and what counts as a main home?

Your main residence is the property where you live habitually or with which you have the strongest personal and professional ties. It must be declared as such via the Biens immobiliers section of your online tax account.

Homeowners are required to declare changes in how a property is used (for example, switching from a main home to a second home, or from personal use to rental) by June 30 for changes relating to the previous year. 

People who are non-residents for tax purposes cannot have a ‘main residence’ in France for tax purposes even if they only have one residence in France.

Other local property-related taxes

Rubbish collection taxes: TEOM and REOM

Most households also pay a rubbish collection tax. This is either the taxe d’enlèvement des ordures ménagères (TEOM), which is added to the taxe foncière bill, or the redevance d’enlèvement des ordures ménagères (REOM), which is billed separately.

Some communes include a variable “incentive” element based on the volume of rubbish produced. In principle, these charges should reflect the cost of the service, although there have been reports of councils using them to raise additional revenue.

TEOM must be paid by the person who pays the taxe foncière bill, but it can be recuperated from a tenant if the property is rented out, as part of the tenant’s charges. REOM is only payable by the person who uses the property.

Other additions to taxe foncière

Taxe foncière bills may also include smaller additional levies, for example to fund flood prevention works or the acquisition of land for public projects. 

In some cases, special taxes apply to properties that left vacant, which means unused and unfurnished.

How local property taxes are calculated

With the exception of REOM, local property taxes are calculated based on a theoretical annual rental value known as the valeur locative cadastrale (VLC). For taxe foncière, the taxable base is half of this value, to which percentage rates voted by the commune and often an intercommunal authority are applied.

VLC calculations are complex and are based on rental market studies last carried out in 1970. They take into account floor space, comfort elements (such as bathrooms, central heating, or elevators), maintenance condition, luxury category, and dependencies such as garages or swimming pools which are assigned notional surface areas.

VLCs are increased annually in line with inflation, as set out in the national budget. They are also adjusted when extensions or new facilities are built and declared.

Homeowners who believe their VLC is too high can request a detailed breakdown from their centre des impôts fonciers and, in some cases, challenge elements such as the maintenance coefficient, luxury category, or declared floor space.

A long-delayed reform of VLCs, intended to reflect modern rental markets, is now expected to apply only from the early 2030s. This is intended to make use of rental values declared via the Biens immobiliers system, but will in most cases be based on the typical value of house or flat in a given district. 

This has given rise to some concerns as the current VLCs are invariably far below market rental rates, however officials say adjustments will be made to the values obtained from the surveys so there is no sudden steep hike, the aim not being to increase taxation but to make sure VLCs fairly reflect factors such as how desirable a given location is in the current market.

In theory the overall tax revenue for the council should remain similar, but households may see a rise or drop in their individual bills.

Moving forward, it is intended that the values should be readjused on an ongoing basis based on information supplied each year via Biens Immobiliers.

What about the year you buy a property?

Taxe foncière is assessed on the owner as of January 1. In practice, buyers and sellers customarily agree in the sale contract that the buyer will reimburse the seller for the taxe foncière on a pro-rata basis from the date of purchase. This is a private arrangement and does not affect who the tax office bills.

Are exemptions or reductions possible?

Several exemptions or reductions exist, though most apply only to main residences and residents of France.

For taxe foncière, owners aged 75 or over may be fully exempt if their household income is below modest means thresholds. Those aged 65 to 74 with similar incomes may receive a €100 reduction. Other exemptions may apply to certain new-build properties or following approved energy-efficiency renovations.

For taxe d’habitation, the main exemption applies to residents who move permanently into a care home or hospital while retaining ownership of their former home. Certain business-related exemptions may also apply.

If you believe there is an error on your bill, you can submit a formal challenge (réclamation) via your personal tax account.

The taxe d’aménagement (‘garden shed tax’)

Separate from annual local taxes is the taxe d’aménagement, a one-off tax payable on certain construction works requiring planning permission. This includes extensions, garages, verandas, conservatories, sheds, swimming pools, carports, and some renewable energy installations, above specified size thresholds.

The tax is usually declared via the Biens immobiliers section of the tax website. Failure to declare completed works can result in penalties, and buyers may become liable for unpaid taxe d’aménagement on undeclared extensions built by previous owners.

For 2026, the taxe d’aménagement has fallen by 4.06%, reflecting a drop in the construction cost index. Rates are set per square meter, with different base values for Île-de-France and the rest of France, to which departmental and communal percentages are applied.

Declarations are important not only for this tax but because property improvements generally increase a property’s VLC and therefore future taxe foncière bills.

Business taxes and holiday rentals

Owners who rent out second homes as holiday accommodation may also, in some cases, be liable for the cotisation foncière des entreprises (CFE), a local business tax.

This is most likely where the activity is done on a regular basis and registration of a business becomes required. 

However, in some areas CFE is payable even if no business is registered, as long as furnished rental income is more than €5,000. This depends on whether the commune has chosen to apply CFE to tourist accommodation.

Because rules and exemptions vary locally, it is best to consult the local business tax office for a definitive answer.

What local property taxes fund

Local property taxes help finance municipal services such as road maintenance, schools, rubbish collection, public lighting, and flood prevention, as well as services provided by intercommunal authorities grouping several communes.

While central government compensates councils for the loss of taxe d’habitation on main residences, many local authorities argue this compensation is insufficient, contributing to upward pressure on other local taxes.