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French Taxation

Local Property Rates in France 2015

Friday 02 October 2015

Local rates bills have remained broadly stable this year compared to 2014, with the average amount payable by each household around €2,000.

As most readers will be aware, owners of French residential property are liable for two local property taxes (or rates), called the taxe d’habitation and the taxe foncière.

The former is paid by the occupier and the latter by the owner, although of course in most cases they are one and the same household.

The rates payable are based on the notional rental value of each property, a figure that is revised each year by central government, and to which a locally determined percentage rate is then applied by the local councils.

So any change in the rates payable is made up of two components - the rateable value of the property and the percentage rate applied against this value. The former is decided by the government, whilst the latter by the local councils.

Although the French press make a great deal about the latter - the taux d'imposition - it really cannot be properly understood without being read in conjunction with the rateable value (valeur locative), for a council may apply a high percentage rate simply because the rateable value of the stock is low.

This year the government imposed no increase in the nominal rateable value of properties, due no doubt in part to having one eye on the regional and departmental elections this year.

Similarly, according to a recent report from the Forum pour la gestion des Villes et des Collectivités, most local councils have kept the lid on the percentage rate, which has increased on average by only 0.9%.

There are of course exceptions, most notably Toulouse, where the taxe d’habitation increased by 12.3% and the taxe foncière by 14.3%. In Lille the taxe foncière also increased by no less than 24.5%. There was also an increase in the taxe d’habitation of 4.2% in Lyon, Bordeaux 3.7% and Marseille 3.3%.

In the current climate of austerity it is a major challenge for many local authorities to keep rate increases to a minimum due to the reductions in grant support from central government that are taking place.

In the following table we show an analysis of the average local rates payable in 2015 in the major cities and towns of France, which should provide a useful guide to what you might expect to pay wherever you own property in France.

The figures are those for a property having a rateable value of 1.5 times the average of all properties.

In principle, those owning a smaller than average property will pay less than is shown, and an owner of a larger property will pay more. The charges will bear no relationship to your income, although there are concessions for those on a modest income.

The table shows that the town of Montpellier, in the Herault department of Languedoc Roussillon, has the highest combined local rates. By contrast, residents of Paris pay the lowest, mainly because of the large sums the city receives in business rates, something of a national anomaly.

In certain towns and cities* where there exists a housing shortage the rates payable on building land have shot up considerably this year, as they are now based on the development value of the land. These increases are not taken into account in the table, which concerns only residential property.

Neither does the table take into account the application of a 20% surcharge on the taxe d’habitation for second homes, which is considered elsewhere in this Newsletter.

TownTaxe d'habitationTaxe Fonciere
Le Havre€830
Le Mans€1,090€1,011
Source: Forum pour la gestion des Villes et des Collectivités.

*Ajaccio, Annecy, Arles, Bastia, Bayonne, Beauvais, Bordeaux, Draguignan, Fréjus, Genève-Annemasse, Grenoble, La Rochelle, La Tesle-de-Buch-Arcachon, Lille, Lyon, Marseille-Aix-en-Provence, Meaux, Menton-Monaco, Montpellier, Nantes, Nice, Paris, Saint-Nazaire, Sète, Strasbourg, Thonon-les-Bains, Toulon and Toulouse.

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