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French Taxation

French Property Rates in 2017

Tuesday 11 July 2017

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

Owners of residential property in France are liable for two local property taxes (or rates), called the taxe d’habitation and the taxe foncière.

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

As a result, any change in the rates payable is made up of two components - the rateable value of the property (valeur locative) and the percentage rate (taux d'imposition) applied against this value; the former is decided by the government whilst the latter by the local councils.

This year the government imposed a 0.4% increase in the nominal rateable value of properties.

In contrast, most local councils have kept the lid on their percentage rate, with 85% leaving the rate unchanged.

On average in the major towns and cities of France the taxe d’habitation has risen by 0.1% and the taxe foncière by 0.3%.

Somewhat exceptionally the city council of Limoges increased the taxe d’habitation 3.70% and the taxe foncière by 6.50%.

Outside of the major cities some departments have increased their own rate for the taxe foncière, notably Moselle (10.0%), Ardennes (9.8%), Cher (8.2%), Sarthe (7.5%), Alpes-Hautes-de-Provence (6.0%), Ile-de-Vilaine (5.6%), Vaucluse (5.0%), and Dordogne (4.5%), but these increases had only a minor impact on the total charge.

Rates Payable in 2017

The following table shows an analysis of the average local rates payable in 2017 in the major cities and towns of France, which provides a useful indication as 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 figures shown are before any rate relief that may be granted to those on a modest income, or for other reasons.

The town of Montpellier, in the department of Herault, 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.

The table does not take into account the application of a 20% surcharge (60% in Paris) on the taxe d’habitation for second homes in a small number of municipalities.

TownTaxe d'habitationTaxe Foncière
Le Havre€839
Le Mans€1,119€1,033

Source: Forum pour la gestion des Villes et des Collectivités

2018 Onwards

As we reported in our June Newsletter, President Macron is proposing to abolish the taxe d'habitation for around 80% of households, which was planned to be operative from 2018 on a phased basis to 2020.

Those who will be exempt are households with a net taxable income under €20,000 for each 'part' of the household.

Thus, a couple with a joint income of €40,000 pa would be exempt, as would a couple with two children earning no more than €60,000 pa.

Councils will be compensated for the loss in income by a direct grant from central government, but they are putting up stiff resistance to the change.

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