French News Archive


Abolition of the Taxe d'Habitation

Friday 08 November 2019

The main developments this year concerning the fast disappearing local residence tax in France, the taxe d’habitation.

As we have previously reported in the Newsletter, one of the two local property rates, the taxe d’habitation, is being abolished on the principal residence.

That process began in 2018 with a reduction of 30% in the tax bill for those up to a maximum income threshold.

Reduction in 2019

The reduction increased to 65%, with the maximum income thresholds also slightly revised.

Specifically, the reduction of 65% this year has been granted to:

  • Single persons whose net taxable income does not exceed €27,432;
  • Couples whose taxable income is no higher than €43,688;
  • Increased by €6K for each additional dependant in the household.

The relevant net income figure used is your revenu fiscal de référence for 2018 as advised on your 2019 income tax notice.

For households whose incomes slightly exceed these limits, but are respectively less than €28,448 (single person) and €45,720 (couple), a small reduction according to income will be applied.

Reduction in 2020

For those who benefit from the 65% reduction complete exemption from the tax will occur in 2020.

  • For single persons with an income in 2019 no greater than €27,706;
  • A couple whose income does not exceed €44,125;
  • Increased by €6K for each dependant.

A similarly small reduction will occur for those whose income slightly exceeds the maximum income thresholds.

The relevant net income figure used is your revenu fiscal de référence for 2019 as advised on your 2020 income tax notice.

Reduction in 2021

Those above the threshold will be granted a 30% tax reduction in 2021

Reduction in 2022

Those above the threshold will be granted a 65% tax reduction in 2022


It is planned that the tax will be completely abolished on main homes for all households by 2023.

At the same time, the specific exemptions from the tax which currently benefit the elderly, widows or disabled and those of modest means, will be abolished from 2021 as redundant.

The television licence fee (contribution à l'audiovisuel public) that is collected with the taxe d'habitation will continue to be payable, and the exemptions that apply will continue in force. The amount payable is currently €139.

Second/Holiday Homes

Second home-owners will continue to remain liable for the tax, and in areas of housing stress a surcharge up to 60% (majoration de la taxe d'habitation sur les résidences secondaires) is payable on such properties, as we set out in our article Holiday Homes and the Taxe d'Habitation.

The new tax will be rebaptised 'taxe d'habitation sur les résidences secondaires et autres locaux meublés non affectés à l'habitation principale (THRS).'

However, the surcharge that is also payable on those properties having a high rateable value will also be abolished from 2021. This tax, called the prélèvement sur forte valeur locative is charged on homes (principal or second) having an annual rateable value higher than €4,573, at rates that vary from 0.2% to 1.7%.

Insofar are rental properties are concerned, where the property is rented to a tenant as their principal residence neither the owner nor the tenant will be liable for the tax.

Conversely, where the property, either furnished and unfurnished, is let out to a tenant not occupying the property as their main home it will still be subject to the tax, when the landlord is normally liable.

Vacant Properties

A small number of other properties will also remain subject to a related tax payable on a vacant property, called either taxe sur les logements vacants/taxe d'habitation sur les logements vacants depending on the location and the policy of the local council.

From 2023 onwards, a new reporting obligation is being imposed on owners, in order to enable local tax offices to establish the liability of the vacant property tax.

Owners of residential premises will be obliged inform their local tax office of the nature of the occupancy of the premises. If the premises are occupied by third parties, owners will be required to declare the identity of the occupant(s) of the premises.

The declaration should be submitted before 1 July of each year, under penalty of a fine of €150 per property, unless there has been no change in the information transmitted since the last declaration.

A similar rule already exist, and this is now a tightenting of that rule.

The Future

The abolition of the tax is having profound financial implications on local municipal councils, who are in the process of losing their principal source of income.

In order to compensate the councils the proceeds of the other main local property tax, the taxe foncière, to which the departmental councils are the current beneficiaries, will be transferred to the municipal councils.

Departmental councils and inter-communal councils will in turn be compensated by the transfer to them of some of the proceeds from valued added tax (taxe sur la valeur ajoutée - TVA), a plan to which they are strongly opposed.

In a related move, a revision of local rental values on which the local property taxes are based is to commence in earnest next year. The values have not be changed since 1970, although they have been uprated in line with inflation each year.

Many fear it will in consequence lead to a substantial increase in local rates, but as it is not planned for introduction until 2026, there is a long road to travel before that happens. Any increases will be introduced on a gradual basis.

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