Time to Talk About Taxes…Property Tax, That Is
We’re back at work for La Rentrée and that means so are the tax administrators. They are busy preparing your property tax notices to issue to all of France sometime in the fall. There are two types of property tax: “Habitation” (housing) and “Foncières” (property). They tend to be similar amounts, although their tax bases are not the same.
You might be very surprised to learn that property tax in France is about one-tenth of the amount property tax in the U.S. That’s a rather broad estimate, but it rings more true than not. Compare my tax bills for my property in Nice with your own and tell me if this is not true!? (Taxe D’Habitation & Taxes Foncières)
The property tax is always paid by the owner of the property. If the accommodation is rented, the lessor can possibly ask his tenant to contribute to the payment of the household waste collection tax, but cannot impose on him the other aspects of this tax. The housing tax, however, is due by the one who occupies the property on January 1st of that year.
The notifications of the taxes being due normally arrive before or during the month of October. This notice includes both the housing tax and the public audiovisual contribution (TV license) if you are also subject to this tax. The deadline for paying your 2020 housing tax is set around November 15th. As every year, people who pay on the internet or by smartphone benefit from an additional 5 days—the deadline for online payment being set for November 20.
You can pay your housing taxes in cash or by any other means (by bank check, for example) as long as the amount does not exceed 300 euros, otherwise only by electronic payment (online payment) or by direct debit (monthly payment or direct debit at maturity). Payment online or by direct debit is therefore compulsory when the amount of the housing tax exceeds 300 euros. If you pay on the Internet, the amount of the housing tax is deducted from your bank account around November 25th, regardless of the day on which the payment order was given. If you pay by mail or at the counter, the collection dates are variable since the amount is debited as soon as your means of payment is processed.
The amount shown on your housing tax notice can sometimes be higher than the amount you actually have to pay. It is therefore better to check that they have not made an error by checking that the rules for calculating the residence tax have been observed. If the amount is wrong, you can dispute it with the tax authorities. To know the steps to follow, see the procedure for contesting your housing tax.
The notices for housing tax on vacant housing (THLV) are sent in November. The payment deadlines are set for mid-December. There is an additional period of five days in the event of payment by Internet.
In the event of a housing tax notice not received by the end of October, you must contact your tax office (unless you have opted for sending the housing tax in electronic form). Note that you can access a copy of your housing tax notice on the tax website. If you have not received your housing tax notice on time, perhaps you are simply exempt from this tax. To find out, you can consult the housing tax exemption conditions for this year and/or call your tax office by phone. They will let you know if you are exempt or not.
The reduction and elimination of the housing tax provided for by the Macron reform are gradually being implemented until full exemption in 2023. You can benefit from an exemption or a reduction of the housing tax for 2020 under certain conditions, in particular of income.
The following categories of people can benefit from a total exemption from 2020 housing tax on their main residence:
* holders of the supplementary invalidity allowance or the solidarity allowance for the elderly
* taxpayers over the age of 60 whose reference income for the previous year is below a certain ceiling and who are not subject to real estate wealth tax (IFI)
* widowed persons whose reference tax income for the previous year is less than a certain ceiling and who are not subject to the IFI
* taxpayers suffering from an infirmity or disability preventing them from meeting the necessities of life on their own, whose reference income for the previous year is below a certain ceiling
Only one of the spouses needs to meet the age or disability condition for the entire tax household to benefit from the exemption.
People who may benefit from the housing tax exemption must live alone or with their spouse. They can also live with dependents for tax purposes or with people receiving the same allowance. At the request of those concerned, the exemption is maintained in favor of people over 60 and widows or widowers when they occupy this home with their adult children if the latter are registered as job seekers and do not have resources greater than the RSA (Revenu de solidarité active). In general, the benefit of these reductions and exemptions is granted to elderly people accommodated in retirement homes or long-term care establishments on condition that they retain the exclusive use of their main home. The Macron reform of the housing tax, which results in the abolition of the tax by 2023, only concerns premises assigned to the main residence. Second homes are therefore excluded.
See complete information about the abolition of the housing tax here.
Being exempt from housing tax does not automatically mean being exempt from property tax or TEOM (household waste collection tax). In the case of property tax (“foncière”), you must receive your notice before October. Otherwise, you must contact the tax office to request a re-sending of the notice and/or access your property tax notice online. You can access your property tax notice on the Internet by accessing your personal space on the tax website. The property tax notice can be downloaded online. Taxpayers who have chosen the online notice are notified of its availability by email.
In the event of a house or apartment in joint ownership, the property tax notice is not sent to all joint owners. Generally speaking, it is the first owner of the right who receives the notice. But the co-owners can designate the recipient themselves. To do this, they must send a joint request signed by each of them to the competent tax center. The property tax payment deadlines vary depending on whether you choose to opt for a payment:
* by post: in this case, the payment deadline is October 15, 2020
* by Internet or smartphone: the payment period is then increased by 5 additional days
* In the event of payment by direct debit, the latter is made around October 25th on taxpayers’ bank accounts
If the payment of the property tax is made in one payment, you still have the possibility of opting for a monthly deduction of your tax. You must then send a RIB (relevé d’identité bancaire) to the tax office, to which must be attached to the tax notice you wish to pay monthly. If the amount of the property tax does not exceed the ceiling of 300 euros, it is still possible to pay by check, by TIP (Titre Interbancaire de Paiement, or ACH), by transfer or in cash. If the amount of the property tax exceeds the ceiling, the taxpayer must pay online on the Internet (via his personal area on the tax site) or opt for a monthly levy or at the due date. If they choose another method of payment, they risks suffering an increase of 0.2% of his property tax.
In the event of a property tax notice not received, you can always access your notice online on the tax website in your personal area. Once identified, you must click on the section “Consult my personal tax situation” (Consulter ma situation fiscale personnelle) then on “My documents” (Mes documents”). If you have not received your property tax and your notice is not available online, you can contact the tax authorities to find out if it is a simple deferral. And if you have not received your property tax notice, it is also possible that you are simply exempt. To find out, you can consult the property tax exemption conditions and/or contact the taxes by phone to find out if it is indeed a tax exemption or error.
If you believe that the amount of property tax appearing on your tax notice is too high, you can file a tax dispute. See property tax: how to claim to know the procedure to follow.
For more information on these taxes and more, consult the official website. It’s published in French and German, but use Chrome or Brave browsers’ translation capability to translate it for you into English!
Adrian Leeds Group®
P.S. We have developed relationships with a number of financial and tax experts to assist our clients. For more information, please visit our Global Money Services page today.