What is property tax?

Did you know? In 2020, French real estate owners paid a total of more than €35 billion in property tax, according to the ministerial statistics service of the Directorate-General for Local Authorities (DGCL, website in French). This amounts to more than one-third of the revenue of local authorities, municipalities, intercommunalities, and departments in France. It’s an important category for the French tax authorities—and for many taxpayers, too. So, we put together the need-to-know info about property tax in France.

Property tax is one of the different forms of taxation levied in France. It’s a local tax paid directly by owners of real estate each year. Property taxes are also paid by usufructuaries  (people who profit from property that they don’t personally own).

This property tax applies both to built and unbuilt properties. We'll give some examples of these different types of property later on. 

The amount of property tax varies according to the characteristics of the property and its location. Other taxes are also added to the property tax, in particular, household waste collection tax (taxe d’enlèvements des ordures ménagères—TEOM) and special facilities tax (taxe spéciale d'équipement—TSE). These additional taxes are included in the property tax assessment notice. 

As mentioned, property tax is a local tax paid by owners of taxable properties—like housing, parking lots, or land. It applies to all types of property, including primary residences, rental investments, or secondary residences. Because it’s paid by property owners, property tax doesn’t apply to rental tenants. 

The other tax that applies to real estate owners is residence tax. The government plans to abolish this tax for primary residences by 2023. However, it will continue to apply to taxpayers with secondary residences. 

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In some cases, it’s possible to be partially or even totally exempt from property tax liability. 

The following groups are exempt from property tax:

• Recipients of the solidarity allowance for the elderly (Aspa)
• Recipients of the supplementary disability allowance (Asi)
• Recipients of the disabled adults’ allowance (AAH)

These exemptions vary according to the age of the recipients and property value. New real estate acquisitions might also be eligible for a two-year property tax exemption. A 50% or 100% exemption is possible for new homes built since January 1, 2009, depending on the municipality and certain additional conditions. 

With some specific properties, the owners—such as the State, local authorities, or major maritime ports—are also exempt from property tax. More information can be found on the tax website (in French). 

You can apply for property tax rebates (i.e. a partial or total reduction in the amount of property tax) under certain conditions, like unoccupied housing. If your property tax is excessively high—greater than 50% of your income—you can also request a rebate. Plus, an automatic rebate applies to people aged 65 to 75, within the income limit set by the Fiscal Code in Article 1417-I (in French).

Different types of properties are subject to property tax:

• Residential properties, professional properties, or parking lots
• Non-built properties, such as rural properties or land

Housing, parking lots, and land for industrial or commercial use are definitely taxable. Building annexes or in-ground swimming pools are included in the calculation as well. On the other hand, mobile assets, such as travel trailers, aren’t subject to property tax.

One notable exception: agricultural properties in Corsica are exempt from property tax on unbuilt properties. 

The amount of property tax depends on various factors, including the “cadastral” value of the property and the tax rates set by the local authorities. We’ll explain these concepts so that you can understand how the calculation works.

First of all, cadastral rental value is the term for the assigned monetary value of a property. Think of it like an estimated annual rent. It’s updated each year and is reduced by 50% as standard to account for costs paid by the property owner for insurance, maintenance, or management. This base amount will then be taxed at the rates approved by the local authorities. So, the final amount of property tax is calculated as the cadastral rental value multiplied by the municipality’s tax rate.

According to the French National Union of Property Owners (Union nationale des propriétaires immobiliers—UNPI), property tax has risen sharply over the last 10 years, with an increase of more than 50%. There are significant variations depending on the area, too. The UNPI noted a 20% increase in property tax in Nantes between 2015 and 2020 and a 19% increase in Limoges. At the departmental level, the increase was even higher—for example, Yvelines has recorded an increase of 76%. 

Property tax notices are generally drawn up between August and October. They can be sent by mail or are accessible in your personal account on Impôt.gouv.fr. 

The payment deadline for property tax is usually around October 15 each year. If you pay electronically, you have an additional grace period of six days.

Several methods are available to owners to pay their property tax. For amounts over €300, you have to pay property tax online. 

However, other payment options are available for amounts under €300: 

• Payment by check, made out to the public treasury
• Cash payment at the public finance center
• Payment by bank transfer

It’s also possible to opt for monthly property tax payments to avoid paying the entire tax amount at once.  

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