5. French Property Taxes on Rental Properties

  1. Furnished Lettings
  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:

In addition, landlords of tourist accommodation (hotels, chambre d'hôtes, camping and caravan sites) are also required to apply to their rates a taxe de séjour, which is payable by their guests. The decision to levy the tax within each commune is at the discretion of each local council. You can read more at Holiday Accommodation Tourist Tax

5.1.1. Property Ownership Tax

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

However, owners of a chambre d’hôte or gîte/meublé de tourisme in rural development areas (Zones de Revitalisation Rurale - ZRR) are able to claim exemption from the tax, subject to a general decision of the local council not to exempt such properties. Most councils grant exemption, but you need to check with them.

You need to make specific application each year using Form Cerfa n°15532*01.

The exemption is only for that part of the accommodation that is used exclusively for letting purposes, and only provided the property is either part of your principle residence or second home.

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!

Gite owners need to read our Newsletter article Tougher Controls on Rural Gîte Tax Breaks.

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 (Contribution Economique Territoriale (CET) ) on the rented property.

You do not need to be registered with the authorities as a 'professional landlord' to be liable for the business rates.

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.

Even if you employ no-one nor have separate offices the law states: 'Les contribuables qui n’emploient aucun salarié en France et qui n’y disposent d’aucun établissement mais qui y exercent une activité de location d’immeubles ou de vente d’immeubles doivent déposer leurs déclarations au lieu de situation de l’immeuble dont la valeur locative foncière est la plus élevée au 1er janvier de l’année d’imposition.'

There are four main exceptions to liability to the business rates for landlords:

i. First, if you let out your main home, or rooms in it, on a seasonal basis then the whether or not you are liable 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, chambre d’hôte and gîte/meublé de tourisme owners are exempt from business rates, provided the rental accommodation is part of your home, whether principal or secondary residence, and subject to no decision to the contrary by the local council. That is to say, statute grants the exemption, but local councils have the power to remove it.

Where the rental accommodation is not part of your home, whether primary or secondary residence, no automatic exemption exists.

Any exemption that may be accorded must, in such circumstances, be at the express decision of the local council for all similar properties in the commune.

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

iv. Fourth, from 2019 landlords whose turnover is less than €5,000pa will benefit from an exemption from the tax.

5.1.3. Residence Tax

Landlords 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.

Owners of a chambres d’hôte or a gîte/meublé de tourisme in rural development areas (Zones de Revitalisation Rurale (ZRR)) are able to claim exemption from the tax, although this is not an automatic right, as a decision as to whether to apply the exemption within any particular ZRR is at the discretion of each local council.

The exoneration also only applies in relation to that part of the property let out to guests. So if you own a property of 200m2, and let out 50m2, the exoneration will only apply to one quarter of the property.

You need to make specific application each year using the form Cerfa n°13567*01

If you pay business rates on the same property then you should not also be liable for this tax.

Commencing 2018, the government have begun abolition of the taxe d'habitation.

The process will start for around 80% of households, which will be undertaken on a phased basis over three years, with complete abolition for eligible households in 2020.

The first-year reduction of 30% in 2018 applies to those with a maximum income threshold:

  • Single persons whose net taxable income does not exceed €27K;
  • Couples whose taxable income is no higher than €43K;
  • Increased by €6K for each additional dependant in the household.

Those whose incomes marginally exceed these thresholds will also benefit from a smaller reduction.

Second homes are excluded (although tenants of such properties are liable), and the TV licence remains payable.

The plan for complete abolition for everyone has has yet to be enacted in law. It remains to be seen if this will apply to second homes.

If you let out separate gîte accommodation, then the landlord is responsible for the payment of the TV licence for each gîte. If you do not pay the tax d'habitation on the gîte(s), then you need to complete Form 3310A. You may be able to get some limited exemption if the gîte is only let out on a limited basis each year.

A landlord has certain legal obligations concerning the residence tax when a tenant vacates their property.

In the first instance they are (formally) required to obtain confirmation from an outgoing tenant that they have paid their latest residence tax bill, provided, of course, they were occupying the property on 1st January, and it is their principal home, in line with the rules concerning liability to the tax.

If they do not obtain this confirmation, then within one month of a tenant vacating their property the landlord is required to inform the tax authority that the tenant has quit. This period is increased to three months where the tenant quits without the knowledge of the landlord.

If the landlord does not do so, then they can be made responsible for any residence taxes owed by the tenant, although this is a rule that is very prescribed. Thus, they can only be made liable where the tax authority have started collection procedures and they would not be liable whether they have acted in 'good faith' or the tenant has done a moonlight flit.

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.

No business rates are payable.

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!

Once again, as with furnished lettings above, the landlord is required to undertake the formalities required in relation to a tenant who quits a tenancy.


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