The income thresholds that entitle households to an exemption in their local rates in France have been revised upwards this year.
All owners of property in France are liable to two local property taxes (rates) – the taxe d’habitation and the taxe foncière.
Under certain conditions households are eligible for a reduction or complete exemption from the taxes.
Different rules apply to each tax, although in each case the income thresholds that apply for complete exemption, for those eligible on grounds of low income, are the same.
The maximum net taxable income (revenu fiscal de référence) to be eligible for complete exemption from the taxes in 2016 is as follows:
- Single person €10,697
- Couple €16,409
These limits are higher if you have children or other dependant adults in the family.
The reference year for determining your eligibility this year is your income in 2014, as notified on your 2015 French income tax notice.
If you were not resident in France in the reference year you need to provide clear alternative proof of evidence of income, although the tax office may be willing to accept more recent proof if there has been a material change in your circumstances.
However, only certain household types are eligible for complete exemption. So even though you may qualify on grounds of income, you may still not be eligible.
In relation to the taxe d'habitation the groups who qualify for exemption, provided they satisfy the test of resources, are:
- those over 60 years of age,
- disabled persons with entitlement to certain benefits,
- those in receipt of Revenu de solidarité active de base (RSA),
- widowed persons irrespective age.
Accordingly, if you do not fall into one of the above eligible groups you cannot claim complete exemption from the taxe d'habitation, whatever the level of your income.
In relation to the taxe foncière the grounds for exemption due to low income are narrower.
Thus, the main groups eligible are those of at least 75 years of age and disabled persons in receipt of disability benefits, provided they also qualify on income grounds.
In the case of both taxes, a capping mechanism is in place for those on a modest income who do not quality for complete exemption, which you can read more about on the link below.
These reductions and exemptions are carried out automatically each year by your local tax office on the basis of your income tax return.
If you think you have missed out, pop along to your local tax office to discuss your circumstances. This applies particularly to disabled persons, where we have found that the rules are subject to differing local interpretation.