Essential rental info

Who should pay housing tax in France? Tenant or Landlord?

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Good news!  From 2023, council tax will no longer be levied on principal residences.
However, any occupant who rents or owns a secondary home must pay the housing tax (in French: taxe d'habitation).

1. What is housing tax (taxe d'habitation)?

The French government collects the housing tax or council tax/residential tax to support local communities. This tax applies to residential property:

  • furnished property for living: houses and apartments;
  • the outbuildings of the accommodation: private parking, garage, cabin

2. How to calculate the amount of housing tax?

The tax base is the same as it was for Primary Residences

The housing tax is based on several factors, including the rental value of the property, the characteristics of the housing (surface, number of rooms, level of comfort, and location), the tax rate set by the local tax authorities, and the taxpayer's financial and family situation. In addition, there are cases of exemption, such as low income and the ceiling set by the tax administration for the housing tax. 

Also, if a television is in the accommodation, an “audiovisual” license fee is added to the housing tax bill to contribute to public broadcasting.

In addition, the State adds a 1,5 % increase on all secondary residence taxes. Furthermore, the French regions apply an extra tax when the secondary home is in a city of more than 50 000 inhabitants. This additional tax varies from 5% to 60%. As an example, it is 60% in Paris.

3. Owner or tenant: who pays the housing tax?

Everyone who lives In France (French or foreigners) in an accommodation, whether owner, tenant, or host, free of charge, must pay the Housing tax. In addition, they receive the council tax bill for the property occupied on January 1st of the tax year, even if they have moved out during the year. Here are several possible scenarios:

  • The owner of an unrented vacant rental property will have to pay the housing tax. 
  • A tenant who owns a rental accommodation as his secondary residence on January 1st, 2023, and moves during the year will have to pay the housing tax of 2023 for the entire year. 
  • Occupants living in a company accommodation (in French: logement de fonction) as their secondary residence on the first day of the year are due to pay the housing tax for the entire year. 

Who pays the housing tax on a VACANT property on January 1st?

The property owner must know the specific situation when a tenant moves out in December and the new tenant moves in February. In that case, no one occupies the property on January 1, and who is responsible for paying that year’s housing tax? 

Both previous and new tenants are not liable to pay it since they did not occupy the property on January 1st. And In fact, unoccupied accommodation is not subject to the housing tax. Therefore, the owner can write to the tax office and request an exemption from paying the housing tax if they prove the property was unoccupied during the relevant period. The evidence can be, for example, lease contracts and entry or exit inventories. Also, be aware of the risk that if the property remains vacant for an extended period (more than 3 months), the owner might have to pay the tax on vacant housing (taxe sur les logements vacants - TLV).

Can owner ask their tenants for housing tax reimbursement?

Suppose the owner-lessors ask their tenant for housing tax reimbursement. In that case, they must include a clause in the lease specifying that, exceptionally, it is agreed between the parties that the housing tax will be payable by the tenant on a pro rata for the duration of the lease. For example, the base could be last year's tax notice or a lump sum like a ½ month's rent. With no clause to this effect in the lease, the lessor may not claim reimbursement of the tax from the lessee nor deduct it from the security deposit.

Do I have to pay the entire housing tax if I leave the apartment during the year?

If the taxpayer leaves their residence at any point during the year, they are still required to pay the total housing tax for the accommodation as long as they were present on January 1st. 

For example, if moving to a new residence on January 2nd, they won’t have to pay the tax for that year, as the responsibility falls upon the previous occupant if they were in the apartment on January 1st. 

Who is responsible for the housing tax in the case of flat sharing?

In the case of flat sharing, the tax authorities will usually issue the housing tax notice in the name of only one of the flatmates. However, adding a second name on the tax bill is possible, making the flatmates equally responsible for paying the tax. 

As the tax authorities do not distribute the tax payment among the roommate, the designated person is responsible for paying the entire amount. After that, the flatmates divide the cost among themselves and reimburse the person who made the payment.

4. Who has to pay the housing tax on a second residence?

The housing tax is due for all secondary homes, either when residing in or owning a secondary home in France. 
To note:

  • If you have been a tenant of a second residence since January 1, you must pay the housing tax.
  • If you own a secondary residence, you must declare occupancy to the tax services before July 1, 2023. Those who own or occupy the property on January 1 of the tax year must pay the housing tax.

Who can be exempt from housing tax on second homes?

Suppose you have moved out of your primary residence to enter a specialized facility such as a retirement home or a long-term care center. Then, the new accommodation becomes your Primary Residence. In that case, you can be exempt from paying the council tax for the previously occupied residence if you keep it as a secondary residence. 

Other exemptions for the "secondary residence" concern the surcharge applied. You can ask to be exempted from this additional cost if:

  • You exercise a professional activity but must reside in your secondary rather than your principal residence.
  • You cannot use your secondary residence as your primary residence for reasons beyond your control, such as work carried out under a Local Urbanism Plan [PLU].

To qualify for this exemption, you must not exceed certain income limits as follows:

  • An adult: 1 tax share (part)
  • A married or PACS couple: 2 tax shares
  • One child: a half-part is a child up to 21 years old (single)
  • Two children: 1 tax share
  • Three children: 2 tax shares

5. When will you receive the council tax notice, and how to pay it?

Generally, during the 3rd trimester of the year, you will receive a tax notice indicating the amount of your housing tax due by post or on your online tax space if you have one. In this tax bill, you will find:

  • the amount due,
  • the payment deadline,
  • the means of payment accepted.

Since 2019, you must electronically pay all taxes over €300 in France. And you can pay your council tax through the three following ways:

  1. Direct online payment on impots.gouv.fr 
  2. By bank debit on the due date with your RIB/IBAN 

6. What to do if I receive my housing tax notice after I have left France?

Suppose you receive your housing tax notice overseas after leaving France. In this case, you may settle your payment directly via a bank transfer to the tax authority if you do not have an account on the France tax website. Otherwise, you can go through the Public Finances website's section if you possess an account number in the SEPA zone. Alternatively, you can contact the Tax Department mentioned on your tax notice to arrange payment.

Ultimately, deciding who should pay the housing tax depends on various factors and can be complicated. So we recommend tenants and landlords consult the French tax authority website or a legal and financial expert to inform themselves of their rights and responsibilities under French law.
 

Editor: Siyi Chen

Sources: Service Public, PAP, UGA international

Credit Photo@ Patrick Perkins

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