As an owner/occupier of French property, you will receive 2 or 3 tax bills a year. Taxe foncière is a land tax payable by the owner of the property. Even if there are no buildings on the land, this tax will still be due unless the land is being used for agricultural purposes. Taxe d’habitation is payable by the occupier of the property and may include a portion for refuse collection (ordures). If not, a separate bill will be issued for this. In some parts of France, refuse collection takes place 3 times a week and hence can be surprisingly expensive. However, if the property is a second residence, you may apply for a reduction on this particular tax. You will not get a reduction on the other two.
For the year during which you buy your property, the vendor will be responsible for paying the taxe d’habitation as he would have been in occupation on 1st January. Even if you become the owner on 2nd January, this tax will still be his responsibility. For taxe foncière and ordures there is usually an apportionment between the vendor and the seller according to how long they own the property in that year. This is usually provided for by the notaire in the final conveyance deed (acte de vente). Although the vendor will be sent the taxe foncière bill, he will be entitled to immediate reimbursement by the purchaser as soon as he provides proof that he has been billed.
Purchasers of new property may be entitled to an exemption from taxe foncière for 2 years and longer in certain developments. When the building works have finished, you must inform the local Mairie. This declaration forms part of the file containing the building permit you received. You must sent 3 copies to the Mairie by recorded delivery. If you are entitled to an exemption from taxe foncière, the period of exemption will begin from the date the works were completed.
A building is considered complete when it can be used for its intended use even though there may still be some work to do – eg decorations. However, the external rendering must be done and safety features in place eg balustrades. This explains why some new properties are left unrendered for a long time!
Within 90 days of completing the works you must also submit a form declaring the works finished. This form will be either with your building permit or can be obtained from the Mairie.
For new buildings you will need to use the following forms:
Individual house – form H1
Apartments – form H2
Commercial premises – form C
Without this declaration being made, you will lose the benefit of exemption from taxe foncière. If you are late with the declaration, the exemption will only run from the period after 31 December of the year following the deposit of the declaration. Also a fine may be imposed.
Failure to deposit a declaration, late declaration or incomplete declaration may attract un complément d’imposition (extra tax) at any time.
If you are buying in a copropriété (co-ownership) the declaration may be made on your behalf but it is wise to check with the developer or the co-ownership manager.
Article 4-1 of the law number 74-645 of 18th July 1974 imposes an obligation on owners of new buildings, those who have added extensions or made substantial alterations to make a declaration to the tax authorities. In fulfilling this obligation, you will benefit from the temporary tax exemption, be sure of your correct tax liability and avoid fines. If your vendor built an extension to the property you are buying, it would be advisable to make sure the local authority is aware of it so that your tax calculation is correct.
To complete the form, refer to the information in your building permit (showing surface area, use etc) You should address the declaration to the Centre des Impots Fonciers for your area.
Both taxe d’habitation and taxe foncière are calculated using the rental value of the property as a base figure. Hence taxes on property in towns and cities is much higher than that on properties in small villages. If your property is situated in a tourist area, there may be additional tax included in the taxe d’habitation charge for maintaining the area to a higher than normal standard. Also, if there is an exceptional expense, such as improving the sewage system, then there may be a separate one-off bill. A property owner in the Languedoc had to pay for this kind of improvement and the charge was calculated according to how far from the main sewage pipe the property was situated. Unfortunately, in his case the bill was approximately £500. He was however given plenty of warning about the work being done.
You should always pay tax bills promptly as you will otherwise incur penalties which will be added on to the reminder bill. It is not uncommon for owners of French property not to receive their tax bills. In this case you should write to the appropriate authority by recorded delivery informing them you have not received a bill and asking them to send it, otherwise you may have great difficulty convincing them that you are not liable for the late payment charge.
Ask your legal adviser to obtain previous tax bills from your vendor so that you are aware what your annual outgoings are likely to be and who to write to in the event of a query.
© France Legal Ltd 2021