Property tax: definition, calculation and exemption

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4 min

Property tax is a French local tax payable by all owners or usufructuaries of real estate located in France. Who must pay it in 2024? Who can benefit from a property tax exemption? Which properties are eligible? When is the payment deadline? Find out how to calculate and pay this property tax.

Capital Video: Property Tax

What is property tax?

Definition

Property tax, like housing tax, is part of local taxes. It is collected each year by local authorities. It is due by owners of real estate, whether rented or not.

A tax that applies to both built and unbuilt properties

It applies to built properties (TFPB), such as:

• houses or apartments,
• parking lots,
• dependencies,
• swimming pools,
• the boats used in fixed point…

But also to unbuilt properties, such as:

• agricultural land,
• the floors of built properties…

This is called a property tax on unbuilt property (TFPBN). This property tax is often accompanied by taxes similar to local taxes, such as taxes on household waste.

Who should pay property tax?

Property tax is a tax payable only by owners or usufructuaries. The person liable for property tax can therefore be an individual, a company or a legal entity (commercial company or real estate company). If the property is rented out, the owner still remains liable for property tax.

Which properties are eligible for this property tax?

Property tax is payable by owners of built or unbuilt properties. In the event of a sale of the property as a life annuity, the buyer is responsible for paying the property tax.

Built properties (TFPB)

A built property includes all constructions that can have a residential or professional use. To be taxable, it must meet two conditions:

• Be fixed to the ground (with the impossibility of moving it)
• Present the character of a real building

As a type of built property, we find:

Unbuilt properties (TFPBN)

An undeveloped property is land that can take several forms:

• mine,
• pond,
• rural land,
• salt marshes…

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How is property tax calculated?

Property tax is paid each year by taxpayers who own a built or unbuilt property on 1 January of the tax year. The property tax is calculated by the tax authorities based on three elements.

The cadastral rental value of the property

The cadastral rental value of the property is used in calculating the property tax. It corresponds to the amount of a theoretical rent that could be applied if the property were rented. This amount is determined based on a fixed amount revalued each year in order to take into account changes in rents.

The revaluation coefficient

The revaluation coefficient is voted on each year by the Government when voting on the finance law.

The tax rate voted by the municipalities

Each year, municipalities and public inter-municipal cooperation establishments vote on their applicable rate for the payment of property tax.

Please note : the rate applicable for the payment of property tax on a property is that voted by the municipality where the property is located.

What are the tax base and the amount of property tax in 2024?

The amount of property tax is equal to the tax base x the tax rate voted by the municipality.

Property tax base

For built properties, the tax base is equal to 50% of the rental value of the property. For unbuilt properties, this tax base is equal to 80% of the rental value of the property. The revaluation rate should be applied to this tax base, whether for built or unbuilt properties. It amounts to 1.039% for 2024.

Application of the local authority rate

Once the tax base has been determined, it is necessary to apply the rate voted by the local authority to know the amount of property tax to be paid.

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When do you have to pay property tax in 2024?

Date of sending of the property tax assessment notice

Owners and usufructuaries receive a property tax assessment notice each year at the end of the summer. In 2024, property tax notices were posted online since August 28 for non-monthly paying taxpayers. They will be for monthly paying taxpayers from September 20.

Monthly taxpayers who have opted for the paper format will receive their notice by post on September 23 to October 9, 2024 and of August 28 to September 20 for non-monthly payers.

Property tax payment deadline in 2024

Property tax must be paid by the payment deadline indicated on the notice. For online payments, it is set at October 20 and for the others, October 15.

What are the methods of payment of property tax?

If the amount of property tax exceeds 300 euros, it must be paid electronically (direct debit or electronic payment). Below 300 euros, property tax can be paid:

• online at impots.gouv.fr,
• by direct debit at maturity (the direct debit is automatically made 10 days after the maturity date),
• by monthly payment,
• by check,
• by TIP (interbank payment instrument),
• by transfer,
• in kind,
• by credit card.

Which housing units are exempt from property tax?

New housing (primary or secondary residence) benefits from a property tax exemption for two years. It begins on January 1 of the year following the year in which the housing is completed. In the event of reconstruction work in your house or apartment, you must file a declaration with the public finance center no later than 90 days after the end of the work.

Who are the people who benefit from a property tax exemption?

Low-income elderly people

Some elderly people with low incomes are completely exempt from property tax. To benefit from this exemption, the following conditions must be met:

• be over 75 years old;
• occupy the accommodation alone or with his/her spouse or with dependents;
• income from the previous year must not exceed a certain amount (for the 2024 property tax, 2023 income must not be greater than 12,455 euros for the first part of family quotient and 19,107 euros for two shares).

Please note : People receiving the solidarity allowance for the elderly or the supplementary disability allowance are exempt from property tax on their main residence, which they occupy under the conditions mentioned above.

Beneficiaries of Aspa, Asi and AAH

People receiving the solidarity allowance for the elderly (Aspa), the supplementary disability allowance (Asi) or the allowance for disabled adults (AAH) can benefit from a total exemption from property tax on their main residence. Whether they occupy their home alone or with a spouse or with dependents. For AAH beneficiaries, their income must also not exceed a certain amount.

Property tax relief

A person aged over 65 and under 75 can benefit from a flat-rate reduction of 100 euros on the amount of property tax. Provided that they meet the same housing and income conditions as those mentioned above.

Similarly, taxpayers who are not subject to the IFI and whose 2023 reference tax income does not exceed (for the 2024 tax) 12,455 euros for the first part of the family quotient, benefit from a capping their property tax on their main residence.