Towns in south-west France are set to target owners who fail to correctly declare the status of their property.
Authorities argue that misclassification of second homes as main properties is causing the loss of millions of euros per year. Most of this comes from the loss of revenue from the second-home tax (taxe d’habitation).
A new deal between local authorities in the Pays-Basque and the national tax authorities will allow communes to directly penalise property owners who fraudulently classify their second homes as main properties.
“Municipalities and urban areas that are already conducting investigations will be able to provide the results of their work to the tax authorities,” said Socialist MP Peio Dufau to France3.
“They will then take up the matter and simply issue fines, because they will practically already have the fraud established.”
Fines will comprise up to three years of retroactive taxe d’habitation payments, and a targeted tax audit (redressement fiscal) of the property.
Mr Dufau said the agreement should be officially signed in the coming weeks.
Generally, it is the tax authorities themselves who issue penalties for those who incorrectly pay taxes.
The measure is a first in France, but a closer working relationship between tax officials and local authorities is developing.
"Current legislation allows local authorities to participate in the census of local direct tax bases by organizing the mutual exchange of relevant information between themselves and the tax authorities," said the Ministry of Public Accounts in January 2026, responding to a question from Senator Cédric Vial on fraudulent main home declarations.
"This approach should also be prioritised to ensure the reliability of the number of primary residences and their occupants when these variables are used to calculate state grants."
In the last two full years, tax authorities have recuperated nearly €260 million in tax payments from reclassifying properties as second homes.
However, as of January 2026 "tax authorities have exclusive jurisdiction over the management of the local direct tax base and tax audits," the ministry said.
Swathe of properties changing status
Between 2020 and 2023, taxe d’habitation was gradually turned into a tax exclusively for second homes, and is now only levied on properties declared as secondary residences
Many owners therefore declared their second homes in the area as main properties to avoid the tax.
Around 5,000 properties in the Pays-Basque are thought to be incorrectly declared as main homes when they are in fact secondary residences.
While the crackdown applies across the entire Basque Country agglomeration (158 communes with more than 320,000 residents) large towns such as Biarritz are the central target of the new measures.
The number of second homes in Biarritz has decreased 11.5% since 2024, statistics show.
Authorities believe that in many cases this has not been due to a shift in residential habits but owners misleading authorities about the use of properties, with more than 1,000 properties in the city believed to have been fraudulently reclassified as primary residences.
The city has long been classified as a zone tendue due to housing pressure from second homes, and has previously raised additional rates on the taxe d’habitation partly due to housing shortages.
Local authorities can ask tax services to conduct audits of properties to confirm declarations are correct, to ensure information held by the municipality is correct.
Financial issues
Biarritz suffers twofold from misleading declarations.
Primarily, it loses out on taxe d’habitation payments, potentially leading to a funding gap.
Property taxes including the taxe d’habitation are some of the last remaining locally-sourced revenue streams for municipalities in France, going to fund local services and improvements.
Around €750,000 is thought lost every year in taxes due to incorrectly declared second homes.
In addition the city faces national fines due to the misinformation.
The SRU law passed in 2020 requires towns of a certain size such as Biarritz to have a minimum number of social housing units compared to private main residences.
If there are too many properties listed as private main homes, this falsely increases the proportional number of social housing units that should be in the city, and has led the government to issue penalties against Biarritz.
Recently, the town has faced fines of €250,000 for failing to reach social housing quotas, fines that local authorities believe are caused by the mislabelling of second homes.
“At the town level, we have no means of enforcement or direct control,” said Biarritz official Manuela Dizier Chanfreau to France3.
Checking water metres to assess whether these reclassified main homes are genuinely being lived in full-time is “currently under consideration, but it hasn’t been implemented yet,” she added.
However, assessment of whether a home is truly a main residence can be made through several factors.
"The identification and taxation of secondary residences... relies on a declaration system based on the owners and occupants of a secondary residence," said the Ministry of Public Accounts to the Senate in 2026.
This is the biens immobiliers declaration, in place since 2023 (more information on the declaration is available below).
"While the declarations filed by taxpayers benefit from a presumption of truthfulness, the tax authorities strive to verify their accuracy and, if necessary, issue additional tax assessments," the ministry added.
Authorities have "cross-checking methods at their disposal to examine the consistency of declarations of changes in occupancy status with income tax returns."
This includes indicators based on a family's centre of interest (address of school attended by children in the household, information from a home insurance policy) and economic information (address of employment office and, where eligible, an employer certificate confirming that individual is teleworking).
These can be used to verify the declaration of a property owner.
Ensure home is correctly listed
As mentioned, the main way authorities assess the nature of a property is through declarations from owners themselves.
Property owners can declare the status of their property via the French tax site, through the biens immobiliers section.
In 2023, all homeowners in France needed to verify the status of their property (rented, lived in, second home, etc) through the new system.
Since then, owners must notify tax authorities only if the property’s status changes, with a deadline of June 30 on the year following the change.
If they do not, they in theory risk a fine of €150, although tax authorities recently confirmed that in 2026 this would be limited to landlords or entities that owned 200 units or more, and not individual property owners.
You can use the biens immobiliers section to ensure the information about your home is correct.
Second home owners should be receiving annual taxe d’habitation bills for the property.
Very few exemptions exist, and where they do, they are mostly for business owners or those renting in larger cities to work.
You should contact the tax authorities to confirm your situation, as you may be fined or have to pay backdated payments in the event you have not been paying the tax (even if in error).
However, authorities are more likely to be lenient to those who proactively try to rectify these issues.
