Photo by Mathias Leclerc

A Take on Tax -- The Kind You Won't Mind

French Property Insider
Volume VIII, Issue 34
September 2, 2010
Paris, France
adrianleeds.com/frenchproperty/insider

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Bonjour French Property Insider Subscriber,

France has a bad reputation for high taxes, but you would be very surprised to learn that property tax in France is actually very low, particularly in Paris.

There are two types of tax due annually: "taxe d'Habitation" (resident tax) and "taxe Foncière" (property tax). These taxes go towards your local community for things like street cleaning, trash collection, education, community facilities and of course, the administration.

Taxe d'Habitation is paid by the party resident in the property on January 1st. If you own an apartment and rent it 100% of the year, then your tenant will be responsible for paying this tax. If not, then you will be liable.

Taxe Foncière is paid by the owner. Both taxes often are very similar in cost and amazingly, each seems to equate to approximately 1€ per 1000€ of the value of the property annually. Yes, you read right. An apartment of 50m2, valued at about 500,000€ has a tax bill of about 500€!

By comparison, in the U.S., the lowest tax rate is $1.72 per $1000 of value (Louisiana) and the highest is $18.20 per $1000 of value (Wisconsin). So, take the same example. A $500,000 property in Louisiana has a tax bill of $860, but the property in Wisconsin has to choke up $9,100. In New Jersey, more than 50% of all households pay more than $5,000 in tax per home. I could provide much more detail, but if you are a property owner in the U.S., you might not want to be reminded!

The assessment in France is not based on the value of the property, as it is Stateside, but is determined by a notional rental value of the property known as the "valeur locative cadastrale." Changes to your property, such as the addition of central heating, another bedroom or a swimming pool have an impact and therefore on your tax assessment. These changes are required to be reported to the tax authorities (Centre des Impôts Fonciers or Bureau de Cadastre) within 90 days of completion of the work.

The "valeur locative cadastrale" is reviewed by the administration every year to determine if a tax increase is due or not. An update on the status of the local taxes was just released by the Paris City Hall this week. It reports that after an increase in tax was imposed in 2009 of 9%, the city now confirms that there will be no increase of tax until 2014.

Despite the increase of last year, Parisians pay well below those of other major cities in France.

For example, in 2010 for a family with two children occupying a dwelling of 80m2, the taxes are:

Tax/City	Paris	Lyon	Marseille	Bordeaux
Taxe d'Habitation	435€	850€	1,019€	1,087€
Taxe Foncière	600€	645€	825€	1,082€

Taxe Foncière assessments are sent out normally at the end of August and are due October 15th. Taxe d'Habitation is assessed September 30th with a deadline of November 15th for payment. If you choose to pay online (http://www.impots.gouv.fr), you get an additional five days grace period after the payment date stated on your tax notice.

From a personal sentiment, I have never minding writing that check every year to the tax authorities. While tax is a necessary evil if we want to live in a sophisticated society, here there is evidence that the money is (generally) well spent. Every evening the garbage trucks pass keeping the streets clean -- daily. The public schools were better than excellent for my daughter who graduated with an international baccalaureate degree -- at no charge. Around the corner, the historic iron marketplace, the "Carreau du Temple," is now under renovation to become a public multi-purpose facility of which we can all take advantage. The City Hall of the 3rd arrondissement was the first to provide WiFi all over the district many years ago and never stops providing programs of all sorts on the public level.

I could go on and on and on, but it would just make you wonder where all that tax you pay Stateside really goes. Do you know?

A bientôt,

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