PROPERTY TAX 2023. Owners should see their bills soar this fall. In question, in particular, the increase in cadastral rental values.
[Updated May 24, 2023 at 4:37 p.m.] After an average increase of 1.9% in 2022, the property tax is expected to rise again in 2023. And for good reason, the cadastral rental values ??which serve as the basis for the calculation of this local tax will rise sharply in 2023. As expected, the latter will now take inflation into account, which will automatically cause the bill to soar. The increase in the property tax will therefore reach at least 7.1% in many municipalities. Some of them should even go further to compensate for the reduction in state grants, the definitive abandonment of the housing tax and the increase from 5 to 10% of the household waste collection tax ( TEOM) in 77% of French communities. Results of the races, some owners could see their property tax explode by more than 10% in the fall.
The property tax is a tax payable by the owners. It can be an individual, a company or a legal person. Please note that two types of properties are subject to this tax. Built properties: these are essentially residential premises, building floors, parking lots and land forming an indispensable and immediate dependency on these constructions. Then, unbuilt properties (ponds, salt marshes, mines…). Here, the tax is due by the owner or usufructuary: right to use a property and to receive rental income from it, without being able to dispose of it, in particular the sale of land, on January 1 of the tax year . It is collected by the local authority (municipality or EPCI, EPCI, public institution for inter-municipal cooperation with its own taxation), on whose territory the land is located. There are permanent or temporary exemptions (under conditions).
Almost all property owners are liable for property tax. However, a few exceptions exist and allow you to obtain an exemption. For a total exemption as a taxpayer, several situations exist. Be a beneficiary of the AAH, be over 75 years old on January 1 of the tax year, or finally, be a holder of the ASPA or the ASI. For the exemption relating to property, new housing is concerned for a period of 2 years. Old homes that have undergone work to save energy can benefit from an exemption from property tax for 5 years. Finally, new constructions for use as a main residence financed at 50% by loans subsidized by the State benefit from a 10-year exemption.
Keep in mind that your reference tax income must not exceed a certain threshold. You must also respect so-called cohabitation conditions, explained here. As Le Particulier reminds us, the exemption does not apply to the household waste collection tax (TEOM), appearing on your tax notice. What about property? Any new construction or addition of construction allows you to benefit from an exemption from property tax for 2 years from January 1 of the year following the end of the work.
In detail, you must make a declaration to your public finance center within 90 days after the end of the work. As a reminder, this is the H1 declaration for a house and H2 for an apartment. Rural buildings for agricultural use are not affected by property tax. Be aware that some communities allow you not to be subject to property tax. This is the case if your home is energy efficient and you have carried out work to this end (which may give rise to partial or total exemption for 5 years) or if it is exposed to specific risks, for example . To find out about the property tax exemptions specific to your municipality, you should inquire at its public finance center.
Property tax is a local tax that affects property owners. Its amount depends on your situation on January 1 of the tax year, which means that you are still liable for property tax on real estate, even if you sold it during the year. The calculation is made from the cadastral rental value and the rate voted by the community. There is also the property tax on unbuilt properties. It is due by the owner or usufructuary of land on January 1 of the tax year. It is collected by the local authority (municipality or EPCI with its own taxation), on whose territory the land is located. There are permanent or temporary exemptions (under conditions).
Like housing tax, the calculation of property tax on built properties is based on two separate values. The first is the cadastral income. It corresponds to the cadastral rental value, reduced by a reduction of 50%. This value corresponds to the theoretical annual sum of rent that would have to be paid if the property were rented. It is established on the basis of ten criteria. Created from the conditions of the rental market in 1970, cadastral rental values ??are intended to evolve, as they are now considered obsolete. The tax authorities thus carry out a review on a case-by-case basis. If your property has been expanded or modified, this value is subject to change. The rental value is then multiplied by the tax rate (read below), determined by the local authority.
If you own your principal residence, it is possible that you will look gloomy when you know your property tax notice. This year, this local tax has increased by an average of 1.9%. In some municipalities such as Marseille, the increase observed is quite dizzying: 13.1%. This unprecedented increase can be explained by two main factors. First, the revaluation of cadastral rental values ??of 3.4%, they serve as the basis for calculating the property tax. Also, inflation is now taken into account in the calculation. With the rise in consumer prices (6.2% in October 2022 over one year), the property tax is taking a big hit. In 2023, cadastral rental values ??could increase by more than 7%.
The method of calculating rental values ??will change in 2026. It will take into account the rents charged in 2023, and not those charged in 1970 as is still the case today. A new blow for the owners, because this new method should once again influence the tax base of the property tax. And de facto, increase its amount. Finally, keep in mind that your property tax may increase even if your municipality does not increase the rate. In reality, it is the household waste collection tax (TEOM) that could change the game. An increase of 5 to 10% in 77% of French communities is announced, enough to cringe even more.
Beware. A word of advice, pay now without delay on the tax website, by logging in with your tax ID and password. In case of late payment, you expose yourself to a 10% increase in the amount of local tax. “The penalty applies if you have not paid your tax within 45 days of the collection date,” it says on the public service site.
Note that it is quite possible to monthly pay your local taxes, including property tax. Be careful however, for this, it is necessary to have a bank account or a booklet A, domiciled in France or Monaco. You have the possibility of monthly payment of your property tax until June 30 for the payment of your local taxes for the current year. Remember that the monthly payment is only valid for the following year. The tax for the current year must be paid via another means of payment.
If you want to know if you are potentially eligible for housing tax reform, a specific simulator is available by clicking here.
However, carrying out a pure and hard simulation of its property tax is not possible because of the too many criteria related to the consistency of the taxed property.
Ever thought the bill was particularly salty this year? Expect local tax to be even higher in the years to come! Property tax jumped 27.9% between 2010 and 2020, according to the National Union of Property Owners (UNPI). The fault of a revaluation of the cadastral rental values, which serve as the basis for the calculation of the property tax. These are indeed based on the rental market conditions of the 1970s! The tax authorities are therefore updating them. A reform has been initiated, the first effects of which should be particularly felt from 2026. Another element to bear in mind: the rate voted by the municipality. Local authorities will no longer be able to count on the revenue generated by the housing tax, which has been abolished for main residences. Logically, the property tax rate should therefore increase, an additional element that will weigh in the years to come. Here are the rates for the 10 largest French cities in 2022:
The rise was expected in 2022, but the ax fell. On average, the rate of built and unbuilt property taxes increased by 1.9% in 2022. This is the largest increase observed since 2010 according to the FSL firm. In fact, more than a quarter of the big cities and their associations have increased their taxes this year. In some regions, this local tax has simply soared over the past year, such as in Marseille (13.1%) or Strasbourg (8.9%).
The Taxe Foncière (TF) tax notice is usually available 3 weeks before the payment deadline of October 15th. If you have opted for the online opinion, an email is sent to you to inform you of the availability of your opinion in the “Documents” tab of your private space. In 2021, property tax notices are posted online on August 29, 2022 for non-monthly taxpayers and September 19 for monthly property tax taxpayers. If you opt to receive the notice by paper, the property tax notice is sent by post during September if you are not monthly paid, at the end of October if you are monthly paid.
If you are over 65 and under 75 on January 1 of the tax year, you can benefit from an automatic property tax relief and thus benefit from a reduction of 100 euros . Please note that your reference tax income must not exceed a threshold. The relief is automatically applied by the tax authorities. Subject to income conditions, a taxpayer liable for property tax can benefit from a ceiling.
“This system allows the taxpayers concerned to benefit from a reduction in their property tax contribution of more than 50% of their income”, specifies Bercy on its site. You must submit a request for a ceiling, by completing form n°2041-DPTF-SD, here. Note that it is also possible to obtain a property tax reduction if your property, apartment or house is unoccupied. Be careful, you will have to provide supporting documents to the tax authorities
