12. Planning Taxes in France - Taxes d’Urbanisme
- 12.1 Infrastructure Tax
- 12.2 Taxe d’aménagement
- 12.3 Protection of Open Spaces
- 12.4 Planning Advisory Service
- 12.5 New Highways
- 12.6 Service Connections
- 12.7 Land Tax
- 12.8 Development Tax
- 12.9 Low Density Tax
Although there are no fees or taxes payable on submission of a planning application or works declaration, if consent is granted several taxes are potentially payable.
For major projects the tax can amount to several thousand euros, although thankfully they are not all applicable in all communes, or for all projects.
Whilst there is some local variation, the main fees and taxes are collectively referred to as taxes d’urbanisme.
The government is seeking to rationalise the system of taxation, and in March 2012 several of the existing taxes were replaced by a single tax called the taxe d’aménagement.
However, this change has not been imposed on local councils, so the picture is a varied one across the country.
Only those councils with a local plan in place (either a plan local d'urbanisme (PLU) or plan d'occupation des sols (POS) ) are required to introduce the new tax, unless other by express decision they opt not to do so.
Elsewhere, other councils who do not have a local plan in place can by express decision opt to adopt the new tax regime.
In practice what this means is that whilst many urban councils will apply the new tax, the position will remain unchanged in most rural councils - at least for the time being.
It is planned that by 2015 all other taxes will be abolished.
Not content with this confusion, the government somewhat paradoxically introduced a new tax on low density developments, called the Versement pour sous-densité (VSD).
So the picture is a very confusing one, and our strong advice is for you to make enquiries about the tax implications of your proposed building works with the local council, particularly if it is a major building project. It is doubtful a small local council will be in a position to give a direct reply, so you may well find you need to make contact with the prefecture.
You need to also remember that in addition to the planning taxes, your local rates are likely to increase, due to an increase in the rateable value of the property arising from the construction works. We touch on this below.
12.1. Infrastructure Tax
Let us start with the main tax in place prior to the March 2012 reforms and still in place in many councils.
The tax is called the taxe locale d'équipement (TLE).
It is basically a tax to go towards the costs of the local infrastructure.
The tax is applied in those communes with more than 10000 habitants and in most communes in the Paris region. In other communes it is discretionary, subject to a decision of the local mairie.
It is payable following grant of a permis de construire or a déclaration de travaux. The first payment is due within 18 months of permission being granted, and the second within 36 months.
The calculation of the tax is based on a formula related to the net habitable size of the property. The rate is 1% to 5% of this figure. Depending on the location and property, the actual amount payable may amount to several thousand euros.
12.2. Taxe d’Aménagement (TA)
This is the new tax introduced from 1st March 2012, but only in force in some councils.
The calculation of the tax is based on three main criteria:
- The surface of the property
- The fixed rate per m2 to the size and type of construction
- The local tax rate applied by the council
So the calculation for the tax is: Surface Area x Value x Local Rate
Local authorities will have a large degree of discretion in determining the rate of this tax as well as certain exemptions and reductions.
Accordingly, the tax rate (charged separately by the commune and the departmental councils) can range from 1% to 5%, depending on local determination, although for the Ile de France the rate cannot exceed 1%. In exceptional circumstances the communal rate can be higher.
The figure on which this percentage is based for 2012 is €693 in the regions and €785 in the Ile de France.
It is then multiplied by the surface area of the works.
Example: 150m² X €693 X 2.5% = €2598
Certain types of work are taxed on a fixed charge m² basis, notably swimming pools (€200 m²) and ground based solar panels (€10m²).
12.3. Protection of Open Spaces
This tax is called the taxe départementale des espaces naturels sensibles.
It is payable in those départements where the Conseil Général considers it necessary to meet the costs of protecting and maintaining opens spaces and forests open to the public.
Like the TLE, the calculation of the tax is based on formula relating in part to the size of the property, at rate of about 1%, calculated on the same formula as the TLE.
Where the taxe d’aménagement is in place this tax has been abolished.
12.4. Planning Advisory Service
This tax is called the taxe départementale pour le financement des dépenses des conseils d’architecte, d’urbanisme et de l’environnement (TDCAUE).
It is payable to fund the free architectural and planning advice service available through the Conseil d’Architecture ‘d’Urbanisme et de l’Environnement (CAUE).
It has application to new buildings and extension as well as certain other works.
It is calculated on the same basis as the TLE at rate of 0.30%.
Where the taxe d’aménagement is in place this tax has been abolished.
12.5. Highways Tax
This tax is called the participation pour voies et réseaux (PVR).
It is a tax that is more normally going to be payable as part of a new development project, to go towards the cost of new or improved highway services.
Local mairie can also use the TLE to fund these services, rather than imposing this tax.
The amount payable depends on the cost of the works.
12.6. Services Connection Fee
This tax is called taxe de raccordement à l’égoût (PRE).
It is a tax (or, more properly, a fee) payable for connecting the property to the mains sewer, where the public drainage system is already in place.
In order to apply the tax must have been mentioned in the planning consent.
12.7. Property Ownership Tax - Taxe Foncière
Strictly speaking this tax is not a planning tax; it is the local property tax, but we including it here as it is subject to review when development takes place.
The tax is called the taxe foncière and is one of the two local rates/taxes that are payable annually by property owners.
Within 90 days of the property being ready for occupation you are obliged to advise the tax authority in order that they can undertake a review of the rateable value (valeur locative) of the property.
The taxe foncière is payable every year by owners of the property. The revision of the rateable value of the property will also impact on the level of the other local annual property tax, the taxe d'habitation.
The declaration should be made using Form ‘H1'.
The form should be submitted to your local Centre des Impôts Fonciers, or to your Centre des impôts (CDI), as the former are gradually being merged with the local tax office.
Provided the form is submitted within the stipulated period, then you are granted a reprieve from any increase in the taxe foncière for a period of two years.
Conversely, if the declaration is not made within 90 days then there is the risk of penalties being imposed or, at a minimum, loss of the full two-year exoneration.
12.8. Development Tax
Once again, this tax is not strictly speaking a planning tax; it is a tax on capital gains, but it is included here for completeness.
The tax is called la taxe forfaitaire sur la cession des terrains rendus constructibles.
It is payable on land which becomes zoned for construction through a local plan, but is only payable where a local council has formally decided to impose the tax on the subsequent first sale of this land.
The tax is levied at the rate of 10% on two thirds of the selling price of the land, less VAT payable and other eligible costs.
You can read more on our guide to French Capital Gains Tax.
12.9. Low Density Tax
The government have also given local councils discretionary power to impose a tax on the under-development of land.
The low density tax is called Versement pour sous-densité (VSD).
Under this regulation local authorities will be entitled to stipulate in their local plans a minimum level of density for developments. If this threshold is not achieved by developers and builders then the planning authority will have the power to impose the tax.
The government hopes that the new tax will increase the provision of new homes and slow down urban sprawl.
It is unlikely this tax will have much if any application to individuals seeking to build a home for their own use.
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