Beware of property tax for real estate in France

Property tax applies to all real estate located in France. Unfortunately, parking spaces, garages, boxes and warehouses are not exempt from this tax. The amount of this tax goes directly into local coffers: your region, département and commune.

Who pays property tax ?

For parking : car park, garage, cellar

The ultimate tax for all property owners in France, taxe foncière is generally paid in mid-October each year. If you own a car park, garage or box, you should allow around two months’ rent to calculate the amount of taxe foncière. This tax will have a direct impact on your profitability. Bad news for owners of concession parking: the tax authorities consider that you have usufruct of the property and require you to pay this tax. As with taxe d’habitation, the tax notice is sent to the registered owner on 1 January of each year. If you are late in paying this tax, the tax authorities will apply a surcharge of 10%.

For a warehouse, commercial or craft premises

Property tax is normally payable by the landlord, except in the case of a 3, 6 or 9-year commercial lease. You should refer to the commercial lease when renting out your warehouse, shop, business premises or craft premises. It is customary and authorised for a clause in the commercial lease to stipulate that property tax is payable by the tenant. If your commercial lease does not mention property tax, the landlord must pay it.

Special features for a non-trading property company

If the property is owned by a property company, it is the company that is responsible for paying the property tax. The company is considered the legal owner in the eyes of the tax authorities.

If the property is rented to the partners free of charge, the company is entitled to claim reimbursement of this tax. If the property is rented free of charge, the owner is entitled to claim reimbursement of the property tax from the tenant.

Calculating French property tax

Property tax is calculated on the same basis as council tax. It is based on the cadastral rental value of your property. The tax authorities apply a 50% allowance to this value to determine the net cadastral income. Before applying the regional, departmental and local tax rates. Since 2015, you must also add a revaluation coefficient.

For non-built properties (mines, ponds, forests, rural land), the tax is equal to 80% of the tax base. The figure obtained is multiplied by the tax rate determined by your local authority.

Property tax will be reformed in 2026. The Ministry of the Economy and Finance remains reassuring, but cadastral rental values are likely to be revised upwards. This will lead to a sharp increase in tax for property owners.

💡 Did you know : Property tax is lower in large conurbations. The purchase price per m² is higher, but some taxes cost less in large cities.

Payment of property tax

When do I have to pay property tax?

Property owners have to pay property tax every year. Property tax notices generally arrive between the end of August and mid-September. The deadline for payment, set by the tax office, is mid-October. The government allows 5 days for online payment via the impots.gouv.fr website. The tax authorities apply a penalty to late payers who do not pay their property tax by the deadline. The penalty is an increase of 10% of the amount due. The Direction Générale des Finances Publiques (DGFiP) sometimes grants relief or waives the penalty if your situation justifies it.

How do I pay property tax?

• Monthly direct debit : the amount of your property tax is divided into 12 monthly instalments, debited from your bank account every month. To sign up for the monthly direct debit, go to the tax website. You can also send a letter or e-mail to your tax office or the public finance office if you live in Guadeloupe, Martinique or French Guiana.
• Direct debit : the government deducts the amount of property tax directly from your bank account on the eligible date, usually around 25 October. The process for opting for direct debit is the same as for monthly direct debit.
• Pay online, on the tax website or via the application downloaded to your smartphone or tablet. Identify yourself using your tax number, then go to “pay my tax online” and click on pay.
• Payments by TIP, cheque, bank transfer and cash are also accepted for property tax, unless the amount to be paid is over € 300. In that case, you must pay by direct debit or online.

Exemption from property tax

In certain cases, local authorities may grant reductions or exemptions from property tax. In the case of a new build, the first year is exempt. The law provides for exemptions for people over 75. If you are between 65 and 75 and receive the solidarity allowance, you may also qualify for a reduction. This rebate reduces the part of the property tax that exceeds 50% of the income of your tax household.

For landlords, it is possible to claim a reduction if your property has been unoccupied for at least 3 months. The tax authorities require proof that the vacancy is beyond your control.

Sale of a property during the year

If you are selling your property in the current year, we recommend that you negotiate with the future buyer to apportion this tax on a monthly basis. Ideally, you should include a specific clause in the preliminary sales agreement drawn up by the notary.

Declaration of occupancy

The French tax authorities have introduced a new requirement for property owners to declare their occupancy in July 2023. The new data collected by the tax authorities will make it easier to monitor the value of a property. Property owners will be required to declare the rental income received for each property, and if the property’s market value includes a lower rental income, an alert will be sent to re-establish the property’s real value.