Understanding the French Habitation Tax (Taxe d’Habitation)

If you own property in France, one of the local taxes that has historically affected homeowners and occupants is the taxe d’habitation, often referred to as the French housing tax. Although its scope has changed significantly in recent years, this tax still plays a role for many property owners, especially those with secondary homes or certain types of furnished properties.

What Is the Taxe d’Habitation?

The taxe d’habitation is an annual local property tax that used to be charged on most residences in France, both principal homes and secondary residences. It is levied by the local commune where the property is located and traditionally helped fund community services such as local infrastructure, schools, and municipal facilities. 

However, major tax reform has significantly changed how this tax works:

• Since January 1, 2023, the taxe d’habitation is no longer due on principal residences; French law abolished it for main homes as part of a phased reform. 
• It still applies to second homes, properties that are not your main residence, and to certain other types of residences. 

Because the reform only exempts main homes, many property owners who once paid this tax now no longer have to, but it remains relevant for non-primary residences. 

Who Is Liable for the Tax?

You may be required to pay the taxe d’habitation if you own or occupy a dwelling in France that is considered a secondary residence on January 1st of the tax year. This includes houses, apartments, and even associated dependencies like garages if they form part of the living accommodation. 

Situations That Trigger Liability

• Secondary homes: If you own a furnished property that is not your main home, you are liable for the taxe d’habitation. 
• Tenants: If you rent a furnished property as a secondary residence and you are occupying it on January 1st, you may also be liable, depending on the terms of your lease. 
• Non-residents: Foreign owners who hold a second home in France and do not live there year-round are still subject to the tax unless other exemptions apply. 

Note that the definition of a main residence for French tax purposes generally means the dwelling where you usually live and where your personal and professional ties are strongest. 

When and How the Tax Is Assessed

Liability for the taxe d’habitation is determined based on your situation on 1 January of the tax year. If you own or occupy a property on that date, even if you move in or out later in the year, you can be liable for the full year’s tax. 

Tax Notices and Deadlines

• Tax notices for the taxe d’habitation are usually issued in the early autumn (often in October or November). 
• Payment deadlines are typically set in mid-November, but these can vary slightly by commune and payment method. 
• Many taxpayers choose to pay via monthly installments or direct debit, which can help spread the cost over the year. 

If you miss the payment deadline, French tax authorities may apply penalties, including a surcharge on the unpaid amount.

How the Tax Is Calculated

The taxe d’habitation is calculated by applying a rate set by the local commune to a theoretical rental value of the property, known as the cadastral rental value. This value represents the notional rent the property could fetch on the open market, and it is adjusted periodically by the tax authorities. 

The basic formula works like this:

1. Start with the cadastral rental value of the property
2. Adjust this value based on local tax rules and any eligible exemptions
3. Apply the local tax rate set by the commune

Because local councils are free to set their own rates, the actual amount of taxe d’habitation can vary significantly from one location to another. 

Exemptions and Special Cases

Since the 2023 reform, main residences are fully exempt from the taxe d’habitation. This applies regardless of income or household composition, as long as the property qualifies as your principal home. 

However, second homes and similar properties remain subject to the tax unless specific exemptions apply under local law. Some municipalities also impose additional charges or surtaxes on second homes (e.g., to discourage unused properties), which may affect the final amount due. Related local news highlights this trend, with some communes introducing additional surtaxes on secondary residences to address housing shortages. 

Vacant properties intended for long-term rental may be treated differently, and in some cases are not subject to the taxe d’habitation, though urban areas may apply other local taxes instead.

 

 

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