Property tax Property tax in France: what exemptions?


It’s October: it’s time for many homeowners in France to pay their property tax bill if they haven’t opted for monthly payments.

If you paid in monthly installments, your new tax notice relating to this tax will tell you if you still have monthly installments to pay this year.

Otherwise, the deadline is October 15 or 20 depending on the payment method. Further information is available on the public information site, Public Service.

Local property taxes in France are divided into housing tax – a housing tax payable by whoever lives in a property such as their domicile on January 1 – and property tax, which applies to the owner (s). ) of a property.

Those who own real estate in France, whether residential, commercial or industrial, on January 1 of a given year will have to pay this tax whether they live there or not.

The money collected through the property tax goes to city councils to finance local services.

The housing tax is gradually being phased out for main residences and will be completely abolished for them by 2023.

However, the property tax has increased in recent years, increasing an average of 31.4% between 2009 and 2019, while for the same period the inflation rate was 10.7%, according to the homeowners representative, the National Union of Homeowners.

Read more: Property tax Local property tax in France: who pays and exemptions

What are the grounds for exemption?

There are situations that exempt individuals from paying property tax, or entitle them to reductions.

  • New constructions: New housing, extensions of existing buildings and rural conversions are not subject to property tax for the first two years as long as the construction works are declared to the tax authorities within 90 days of their completion.

Non-residential buildings only benefit from partial relief.

The local municipality can also decide to limit the rebate on new residential constructions between 50% and 90%.

  • Elderly people with modest means: People aged 75 and over on January 1 of the tax year are also exempt, provided their income is below a certain threshold the previous year. This is the benchmark tax income shown on your last income tax notice.

For 2020 income (the latest declared), this ceiling was € 11,120 for a single person, € 17,058 for a couple and a supplement of € 2,969 for any dependent.

The exemption only applies if the person lives alone, or with a partner, dependents or another person whose income is below the threshold.

  • Those who receive AAH, Aspa or ASI: exemptions apply to registered disabled persons of any age who receive the Disabled Adults’ Allowance (AAH) and whose income does not exceed the threshold detailed above.

Elderly people who benefit from the solidarity allowance for the elderly (Aspa) or the supplementary invalidity allowance (ASI), are also eligible for the exemption on their main residence.

  • Over 65: People aged 65 and over on January 1 of the year in question who are not fully exempt are entitled to a reduction of € 100 in property tax for their income as long as their income does not exceed the ceiling mentioned above. above and that the property is their primary residence.

All these groups can continue to benefit from the corresponding tax exemption or reduction if they start living in a retirement home, as long as their property is not occupied.

The administration can also grant a five-year tax holiday to offices converted into housing, as long as they serve as their main residence and not as a secondary residence.

  • Low income households: People whose income is below a certain threshold may see their property tax payments capped if they constitute more than half of their income.

In 2021, it applies to people whose annual income does not exceed € 26,149, increased by € 6,109 for the first dependent and € 4,810 for any other dependent.

This does not apply to waste collection costs.

People who pay IFI property tax are not eligible for this cap.

  • Empty houses: Individuals can benefit from a tax reduction if a property that would normally be rented is left empty. This vacancy must be beyond the control of the owner, last at least three months and relate to the whole property.

The house or apartment must be in a condition suitable for habitation and the owner must have made reasonable efforts to rent it out.

  • Agricultural land: Land used for agriculture is subject to a permanent reduction in property tax rates.

Some land may benefit from a temporary exemption, for example if it is used for the production of timber or nuts. The duration of the exemption is decided by the local authority.

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