New owners of French property should be aware that as a homeowner in France, you pay not one type of council tax but two! To make up for it though, one does include your TV licence fee.
Article written by The Overseas Guides Company
Alexis Goldberg, author of the FranceBuyingGuide.com and a resident of France’s Languedoc, explains more:
“The two taxes are ‘taxe foncière’ and the ‘taxe d’habitation’. All property owners, whether permanent residents or second home owners, must pay these and together they are equivalent to UK council tax. They both, largely speaking, cover local services such as street cleaning, waste collection and municipal lighting.
“The taxe foncière is levied on property-owners, so whether you live in the property or rent it out, you are liable for this. It is the more expensive of the two and the amount will vary according to where the property is located as well as the cadastral value – or notional rental value. The local authority decides on the amount and some regions are much more expensive than others.
“The cadastral value is reviewed every year so the amount due can change. It is calculated on the buildings and land involved and the owner is responsible for keeping information on any improvements, additions to the property and so on updated. The addition of a swimming pool, for example, or change of use to a gîte will affect the amount. It is payable each October and it is important to let the tax offices know when you first buy your French property as there have been cases of the first bill going to the UK address of new owners meaning that they don’t receive notification of it in time, thus making them pay late and incur a fine.
“The taxe d’habitation is paid by the occupier of the property, whether they are the owner or long term tenant. So, if you own the property but rent it out, the taxe foncière is your responsibility but not the taxe d’habitation. If you rent, you have to pay the taxe d’habitation. If for any reason a renter defaults on payment of this, they will be given a fine of 10 per cent of the due tax by the local authority and if they refuse to pay, French law allows the tax authority to take the money directly from their bank account!
“If you are considering letting a property, you are pretty safe since tenants do not normally want to risk such proceedings! Note that the taxe d’habitation includes the TV licence fee so if you don’t have a TV, let them know and it will be deducted from your bill. The taxe d’habitation is less than the former, and again it varies from region to region. Generally speaking, towns and cities will be more expensive than villages or rural properties. This tax is payable in November each year.
“There are a few exemptions and discounts available. Some new buildings may be exempt from both taxes for the first couple of years and reductions in the taxe foncière can be allotted for people aged over 75, those with disabilities and students as long as the property is their main residence. Be aware however that this will only fly if you have submitted a tax return in France declaring your income. Total exemption from the taxe d’habitation may be given to those aged over 60 as long as they are not eligible for wealth tax and are on a low income. It is best to enquire at the local tax office about any of these reductions.”
For details of property all over France, visit the French listings on Rightmove Overseas. One way to save money when buying in France, or moving there, is to use a currency exchange specialist when transferring your pounds into euros. For more information on this, visit the Currency Zone or contact Smart Currency Exchange.
To understand the full step-by-step process to buying a property in France, collect The Overseas Guides Company’s ‘France Property Buying Guide’
The views and comments herein are those of the author and do not necessarily reflect the views or opinions of Rightmove Overseas, Rightmove Group Ltd or Rightmove Plc