---

5. Property Taxes/Rates Payable on Rental Properties in France

1. 5.1. Furnished Lettings
2. 5.2. Unfurnished Lettings

---

5.1. Furnished Lettings

There are three local property taxes/rates for which a landlord of a furnished letting may be liable:

1. i. Property Ownership Tax - the taxe foncière.
2. ii. Local Business Rates - the taxe professionnelle.
3. iii. Residence Tax - the taxe d'habitation.

5.1.1. Property Ownership Tax

All property owners pay the taxe foncière, as this is a tax payable on the ownership of property.

Owners of chambres d’hôtes and classified gîtes and meublés de tourisme in rural development areas (Zones de Revitalisation Rurale (ZRR) are able to claim exemption from the tax. This concession is subject to a general decision of the local council to exempt such properties. However, the rules have recently been changed (March 08) so that exemption is not available for that part of the property that has shared use between the owner and guests. Only the rooms/space used exclusively by the guests would be eligible for the concession.

There is a separate charge for rubbish removal, called the taxe d'enlèvement des ordures ménagères (TEOM), which is normally collected with the taxe foncière. Accordingly, you may need to make separate arrangements for reimbursement of the tax for rubbish removal from your tenant, or accept that this is part of the landlord cost!

5.1.2. Business Rates

As a general rule, if you let out furnished accommodation on a habitual basis, then you are liable for the local business rates (the taxe professionnelle) on the rented property. You do not need to be registered with the authorities as a 'professional landlord' to be liable for the tax.

This rule applies in all cases where the property is a separate dwelling, but it may also apply if the accommodation comprises rooms in your own house, provided it occurs, as always, on an habitual basis.

There are three main exceptions to liability to the business rates.

i. First, if you let out your main home, or the rooms in it, on a seasonal basis then, as a normal rule, you would not be liable for the for the business rates. It will depend on the level of revenue you earn as a proportion of your total revenues; how regularly it occurred; and whether the tax authority considered it to be a secondary activity to your main employment or business.

If you do find the tax authority decide to impose the tax, you should take it up with them and try and contest it. If it is regarded as 'habitual', the local mairie also has some discretion to waive the payment of the tax for such lettings, but you would need to make enquiries to them.

ii. Second, owners of chambres d’hôtes and classified gîtes and meublés de tourisme in rural development areas (Zones de Revitalisation Rurale (ZRR)) are able to claim exemption from the local property taxes on the same terms as stated for the Land Tax in i. above.

iii. Third, you escape liability if you let out lodgings on a low rental, within the terms set out here.

5.1.3. Residence Tax

You do not have responsibility for the taxe d'habitation, provided the tenant occupies the property as their principal home. The tenant is then responsible for the payment of this tax.

However, if you let out rooms in your own house then you also have a liability for the taxe d'habitation, as the property is your home. This responsibility is shared with the tenant(s), provided they occupy their room on an exclusive basis, as their principal home. If they do not occupy the property on this basis, then you will be entirely responsible for the taxe d'habitation.

Owners of chambres d’hôtes and classified gîtes and meublés de tourisme in rural development areas (Zones de Revitalisation Rurale (ZRR)) are able to claim exemption from the tax, on the same terms as stated for the Land Tax in i. above.

If the landlord does not do so, then they can be made responsible for the tax in the year the tenant vacates, although this is a rule that is not always enforced.

5.2. Unfurnished Lettings

The landlord is responsible for the local property rates, the taxe foncière, but the tenant pays the local residence tax, taxe d'habitation, if occupied by them on 1st Jan in the year.

There is a separate charge for rubbish removal, called the taxe d'enlèvement des ordures ménagères (TEOM), which is normally collected with the taxe foncière. Accordingly, you may need to make separate arrangements for reimbursement of the tax for rubbish removal from your tenant, or accept that this is part of the landlord cost!

As with furnished lettings, the landlord is required to notify the tax authorities of the commencement and termination dates of tenants, and if they fail do to so, they can be made liable for the residence tax.

---

Next: Finding Tenants

Back: Taxation of Rental Profits