Essential rental info

All about the housing tax on secondary residence in 2023

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Since January 1, 2023, there has been no Housing Tax (taxe d’habitation) on Principal Residences in France; however, the housing tax stays on Secondary Homes.
Are you the owner or tenant of a second home in France? For 2023, you must pay your housing tax on second homes by December 15, 2023. 

Are you concerned about this tax?
In this blog, Paris Rental will provide all the information you need about the new housing tax.

What is a secondary residence?

In fiscal terms, a secondary home is a place that is not your principal residence. Unlike a primary residence, where you routinely live and have your tax address, a secondary residence is used occasionally or seasonally as a weekend or vacation home. It can also be a furnished Corporate Housing during an assignment abroad.

What is a housing tax on secondary residence?

France's "taxe d'habitation" is equivalent to the Housing Tax, also called the residence tax or council tax. The housing tax on second homes is a local tax in France levied for the benefit of local authorities, which set the tax rate.
The amount of housing tax levied on second homes also depends on the characteristics of the premises to be taxed.

What types of property are covered by the housing tax on second homes? 

The housing tax on second homes applies to the following premises:

  • Furnished residential premises not used as a primary residence (house or apartment).
  • The accommodation is furnished for habitation purposes.
  • Immediate outbuildings (private parking, garage, etc.), even if unfurnished and not adjoining.

I have a second home, do I have to pay housing tax for it? 

If you own or rent a second home on January 1, you must pay housing tax for that entire tax year.

Does the tenant have to pay housing tax?

Since 2023, tenants of their primary residence in France, no longer pay housing tax.

On the other hand, people renting a property as a second home or corporate home on January 1 of the year are subject to housing tax.

Do I have to pay housing tax for a vacant home?

There are many possible reasons for a property to be vacant: change of tenant, property put up for rent or sale, renovation work, etc. 

If the property is vacant on January 1, it will be subject to property tax in the following year. 

Who pays council tax in a shared accommodation?

There is only one housing tax bill per property in the name of one of the flatmates, which means that only one flatmate in the shared apartment is responsible for paying the whole housing tax. The tax authorities do not divide the housing tax payment among the roommates; instead, the flatmates sort it out themselves. 

However, adding other flatmates to the housing tax bill is possible if a declaration is made to the tax authorities. 

How is the housing tax calculated for a second home in France?

The housing tax is based on the dwelling's "cadastral rental value" including outbuildings. The local authorities vote on it. The cadastral rental value is revised yearly according to the consumer price index (CPI).

N.B. The cadastral rental value is the theoretical annual rent the property would yield if rented out.

How to pay the housing tax? Payment methods

Here are the various ways of paying the housing tax in France:

How do you pay council tax over €300?

If the amount of the tax is above €300, you must pay the housing tax electronically.

How do you pay council tax under €300?

1) Pay online ( via computer, smartphone, or tablet):

  • On the www.impots.gouv.fr website, from your "Espace Particulier," enter your tax number and your tax notice number and click on the green "Pay online (Payer en ligne)" button on the login page of your "Espace Particulier";
  • By smartphone or tablet via the impots.gouv application.

2) By direct debit:

Payment is automatically debited ten days after the payment deadline on the housing tax notice. To benefit from direct debit, you must have a bank account or Livret A savings account in France or Monaco that allows direct debit.

3) By monthly payment:

Monthly payments require a bank account in France or Monaco.

4) By check:

  • To pay your housing tax by check, you must send your check with the payment stub specifying your tax reference number and using the pre-addressed return envelope that comes with your housing tax notice. 
  • You can also drop off your check at your local tax office. The tax office will cash it upon reception.​​​​​​

5) By TIP Sepa:

You can pay your housing tax by Interbank payment order (TIP). If the amount of your housing tax does not exceed €300, complete the TIP (Titre Interbancaire de Paiement) form attached to the bottom of your tax notice. 

If this is the first time you use TIP payment, attach your bank details and date and sign the form.

6) By bank transfer:

Remember to mention your tax and notice numbers when you transfer to the tax office.

7) In cash:

If your housing tax is under or equal to €300, you can pay it in cash at one of the partner tobacconists if your tax notice has a "QR code" and the words "payable at the tobacconist's."

8) By credit card:

You can pay your housing tax by credit card at a partner Tobacco shop if your tax notice has a "QR code" and mentions "payable at a Tobacco shop."

Who is eligible for a housing tax exemption in France?

You can only request an exemption from council tax on your second home in the following situations:

  • You can claim an exemption from council tax on your second home if you leave your primary residence to move into a specialized care establishment such as a long-term care center or retirement home. In this case, you are exempt from council tax on the secondary residence of your previous home.
  • Your workplace is close to your second home, so you live there instead of your primary residence.
  • The second home is currently inhabitable for reasons beyond your control, and it requires work to make the property habitable.

How to apply for a housing tax exemption?

You can apply for exemption from the housing tax at the tax office where your second home stands, by sending your claim via your "Espace Particulier" in the "Contact us" section of the online messaging system, or by going to your local tax office in person, or by mailing your claim on plain paper to your local tax office.

What are the penalties if you don't pay your housing tax on second homes?

The tax office sends out housing tax notices for second homes in the last quarter of the year.

The payment deadline for housing tax varies from one commune to another. Generally speaking, if you are a private individual, you have until midnight on December 20 to pay your housing tax online. Your bank account will be debited starting December 27. More specifically, please check the deadline indicated on your housing tax notice.

If you don't pay your housing tax within 45 days of the assessment date, you'll have to pay a penalty of 10% of the tax due.

In conclusion, understanding the intricacies of French real estate tax laws, staying informed about changes in housing tax regulations, and learning about the methods used to calculate taxes on residential properties are crucial for property owners and tenants alike.

 

Editor: Siyi CHEN

Sources : Service-Public.fr, Légifiscal , La Gazette des Communes et les Echos

 

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