Over the past three years, there have been progressive reductions in the number of households resident in France who pay the local property taxes (rates), called the taxe d'habitation.
Around 80% of households are now exempt. The remaining 20% will have to wait until next year before it is finally abolished for all, although they will also get a reduction this year.
This year, complete exemption applies to households whose net taxable income (revenu fiscal de référence) in 2021 was no greater than €28,150 for a single person, which is increased by €8,340 for each of the first two half 'shares' (quodient) of the household and €6,255 for subsequent half shares.
In other words, a married couple would not pay the tax this year if their taxable income in 2021 was no greater than €44,830. If you are married with 2 dependent children, you will not pay the tax this year if your 2021 taxable income did not exceed €57,340. If you live alone with 1 dependent child, you will also not pay any if your taxable income last year did not exceed €44,830.
Where the property is rented on an annual basis, it is the tenant who is liable for the tax, and it is their income that is used in the tax assessment.
Your revenu fiscal de référence 2021 will be given on your tax notice that you will receive in July or August this year.
In order to reduce the impact of this cut-off point, those whose income is slightly higher than the threshold will obtain a partial reduction in the tax. If your taxable income is between €28,150 and €28,192 for the first share of the family 'quodient' (plus €8,861 for the next two first half shares and €6,255 for each additional half share), you will be entitled to a partial exemption in the tax, which varies according to the level of your income.
The formula for calculation of the reduction is complex, but, for example, if you are married and your 2021 income is €46,000, you will benefit from an exemption of 82.5% and you will only pay 17.5%.
If your 2021 (revenu fiscal de référence) exceeds the above limits, you will only be entitled to the 65% exemption, leaving you liable at the rate of 35%.
The rule applies only to those who are also exempt from the wealth tax.
As the income limits vary each year, it is possible that if your income increased in 2021 over 2020, you may become liable for the tax this year.
All households will be totally exempt in 2023, when the tax is finally abolished on principal homes.
The television licence fee (contribution à l'audiovisuel public) that is normally collected with the taxe d'habitation has been abolished this year, a saving of €138.
If you remain liable for the tax next year, as you may be eligible for a larger discount, then you can adjust the monthly direct debit you pay, by going to your account in impots.gouv.fr and change the monthly sum. Go to 'Payer' and then 'Modifier mes prélèvements, moduler mes mensualités'.
Second Homes/Holiday Homes
Second home-owners will continue to remain liable for the tax, which will be called taxe d'habitation sur les résidences secondaires et autres locaux meublés non affectés à l'habitation principale (THRS)
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 or unfurnished, is let out to a tenant on a short-term basis it will still be subject to the tax, when the landlord is normally liable, although there are exemptions in rural areas. See our guide below.
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.
However, the surcharge that was also payable on those properties having a high rateable value has been abolished. This tax, called the prélèvement sur forte valeur locative was 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%.
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