Taxe d’habitation guidelines

(Matt Campbell) #1

Hello all, I’m new to this forum. I’ll bypass all the introductory’s and just get to my question, otherwise this would be a long post (its going to be long anyway). :grinning:

I’ve tried for a while to find out the principles and guidelines for the taxe d’habitation. Granted, my French stinks…but anything I can find seems to dance around my primary questions. My wife and I are from the US and looking at possibly buying a house. House is not inhabited at the moment (for quite some time). Nor do we intend to inhabit it for a few years as it would be a project for later. My initial questions about the tax are: When does it come into effect? Is it only once the property is started to be lived in? What’s constitutes that? How is the tax calculated (this one baffles me as I’ve found nothing). Does that calculation differ for non French citizens? What about foreigners who have said house as a 2nd property? Does the size/surface of the property factor in? What about owner’s income (I’ve seen small bits about that somehow factoring in)? I’ll stop here…but as you can tell I’ve been able to find very little information. Quite honestly, the prospect of us buying a property probably hinges on this tax and how it would affect our budget and years down the road. This property idea would be for our retirement years, so as you would guess, budget is pretty important.
Sorry for the long post, but I imagine you’ll understand given the topic.

Regards
Matt

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(Véronique Langlands) #2

The TH comes into force once the house is habitable. So while it is being done up you don’t pay. It is based on the value of the house and your age, it is theoretically on its way out.
I am afraid it is a bit of a “how long is a piece of string” question.

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(Jane Jones) #3

As Vero says things re Taxe d’Hab are changing so if your move is not imminent it may not be the significant thing.

But just for info…At present you pay more for a second home than for your principal residence, but then the difference in insurance costs tends to cancel that out. Your nationality makes no difference at all. How taxe d’hab is worked out is very French…there is an element that relates to the property itself (size & characteristics) and then an element that is based on the averages of all the dwellings in that commune. Then there are the local charges which will vary by commune. So many different elements go to make up the overall bill. If you have a low income and your house is within the local average then you can get a reduction.

If you are going to be on a very restricted budget, even if taxe d’hab goes there will be other taxes. So do think carefully and don’t overstretch yourself.

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(stella wood) #4

I have friends with 2 properties. One they are working on, but living part-time in the better bits. For that house, they pay TH.

For the second property, they have signed a Declaration that the house is totally empty of furniture (and they are not sneakily camping in the empty house)… that house is currently TH zero. As soon as they put any furniture in the house, it will become liable to TH.

Closer to home… folk have moved all the furniture out of their 2nd home in order to avoid TH. The property was inspected and asserted to be empty (this does not always happen)

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(Geoff Kowalczyk) #5

The house or property is not subject to TdH if it is either habitable or non-habitable but it must be devoid of all furniture, and that means all furniture. An Attestation de Vacances must be obtained from the Mairie to this effect.

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(stella wood) #6

There was a case years ago… and as I recall… anyone who is found to be emptying their property in order to NOT pay TH (1st Jan being the qualifying date)… and then putting the furniture back later in the year… :roll_eyes: They will probaqbly find themselves charged with attempting to defraud… ooops

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(Chris Elliott) #7

When viewing the agents should be able to give you a ball park figure - and remember there’s TdH and the Tax Fonciere - certainly they can tell you the Tax Fonciere.

But the bigger the house - the closer to a town - probably the bigger the town … they all impact on what tax would be. Its basically a notional value that represents its rentable value - same as every country though - someone ascribes a value based on criteria. Local factors both at Commune and Regional level then impact on the actual tax.

In most areas holiday homes don’t get charged more - but in some hot spots they can be charged more - what you don’t get are any discounts based on income etc.

But basically ask the Agent - if the property taxes are huge then the house is probably huge and the heating bills will dwarf any local taxes

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(stella wood) #8

and, as I’ve already posted somewhere… Ask when the property was last valued…

The Tax Foncière can go up alarmingly, for new buyers, due to incorrect valuations in the past… :roll_eyes::thinking: been there… 'nuff said…

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(Matt Campbell) #9

Thanks all for the info. Let me ask a few more questions and tell you what little I do know:
Only info the agent has been able to give me is the TF cost (1000 euro/yr). I did ask about the TH and was told they don’t know. So I will ask again maybe I’ll get a different answer.

Regarding the age factor, I hadn’t seen that in any info on various websites. I’m assuming you’re saying the older you are, the tax decreases? Any guidelines? Or is it subjective?

Second home: I assume this means it is not your primary residence (doesn’t matter where you live/citizenship)?

Regarding short stays and/or re-habing the property: Ideally as the years progress, I guess my thought was we’d set up crude cot arrangements as we clean/fix the place up. I can understand that from a legal perspective, technically TH is now in force. But, would it take into account that the property is still in bad shape and value is low? I can understand that once its spruced up and value goes up, the tax would likely be more. So short question is, do they take all that into account? If not, then that sorta kills the idea.

My original thoughts/plan was this: Find a property that we can fix up over a span of years. If possible, stay in the house during the short stays when we’re there fixing it. Then after 4-6 yrs once its “livable”, we can enjoy it for longer stays (and yes, I expected full taxed to be in affect).
Us: my wife and are still working (me 53, her 49). This idea/project would be for during our retirement years, so we’re in no rush. We know that as US citizens, the most we can stay is 90 days in 6 months. Thus the plan to make this as cost effective as possible, as we’re not wealthy. We just love France and have no desire to retire to Florida like the rest of America. But again, I’m just trying to get as much information as possible to figure out if our dream is even possible. I certainly don’t want to buy a property and end up paying TF (1000 euro) and TH (???) every year for x number of years while we can’t even go stay in the place/enjoy it. It’s not that I don’t understand that this WILL require money…I do. Just trying to gather the figures to make an educated decision. Because if this plan/dream is not possible…well I’m not sure our later years will be much fun. :thinking:

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(Jane Jones) #10

It doesn’t have to be devoid of all furniture to be exempt from Taxe d’hab. You can provide proof that it is not lived in by “tout moyen”, so for example electricity bills that show next to nothing has been used.

But in your case, even living in it for 90 days a year would make it liable - even if you are essentiallly camping. You could probably get the first year without it, as the tax is based on the status of the house & occupants on 1st January.

The other thing to be aware of as is that of course you will need to show you have sufficient resources to get a long stay visa. And in general the threshold will be just above the threshold below which you are eligible for benefits and reductions…

Really if this one tax is likely to be a deal breaker then this suggests you could struggle. Especially as renovation projects are money pits. Perhaps you need to think about smaller properties with lower charges?

But push the agent to give you the figures…

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(stella wood) #11

That is not strictly correct Jane. The rules are quite clear… as have been confirmed in the Charente and in the Dordogne. A property must not be furnished (and this includes camping in it)…

However, for a property in poor state… camping from time to time… while working on it… the Value of the property would be low and the Property Taxes equally low… Once the work was completed, depending on what was done… the Value of the property would be more and thus the Taxes would be higher.

Making a friend of the folk at the Mairie is always a good idea and they can help with all sorts of advice and information.

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(Matt Campbell) #12

You misunderstand me…we wouldn’t stay 30 or 60 or 90 days til some years. Honestly, the first handful of years that we’re working on the property would be maybe 3 wks at most. So yes you are correct, electrical use would be minimal to none. Water, the same. Furniture: none aside from a cot/chair. Really it would be just assorted tools, etc…the type of stuff one would need to re-hab a property.

As for long stay visas, as a US citizen, I read the rules to say I could stay up to 90 days in a 6 mos period just by having a passport. More than 90 days in 6 mos, yes you would need a short-stay visa. Am I wrong about those rules?

We don’t intend to reside in France. We’re more looking at it as a holiday home. A place to stay while traveling in Europe…or just hiding away in France for periods of time. Probably a lot like those of you on this forum. :wink:

I have sent an email to the agent to see ask again about the TH. Hopefully they can turn something up. If not…then I guess that its not meant to be.

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(Jane Jones) #13

Ah well, another french exeption then. When we first bought the house, our Marie and local tax office confirmed that as long as we could prove it wasn’t inhabited then that was fine. So various bills and receipts worked for us.

We’re not in an area where you have to pay a tax on vacant properties, so perhaps that makes the difference.

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(stella wood) #14

We were not charged TH for the first 2 years… but that was because we had no income and were living off house-sale/savings… phew… every little helps…

TH is due to be abolished (possibly) in a few years… who knows what will actually come about… but for a small property, unless in the middle of a tourist trap… it should not be too expensive even for a few weeks a year.

Friends from the US come and spend 10 weeks every year, almost next door to us… delightful company… they love their French hide-away.

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(Anna Watson) #15

To add to and perhaps clarify what has already been said:
Any reductions for eg age / income are only applicable to tax residents of France. There are no reductions on holiday homes.
Your primary residence basically the address you use for all your dealings with the various authorities, including the tax office.
If you don’t pay tax in France you will pay the full rate for taxe d’hab. Since a high proportion of residents don’t pay full rate, the current owner’s bill may not be a good indication of what you would pay as a non resident. The tax office would know but not sure if they disclose this info to third parties.
As has also been alluded to, the property tax system is under review and could change significantly over the next few years, so it would be unwise to build your plans on it as is. For instance, taxe d’hab is being progressively reduced for fiscal residents on low incomes - but the money has to come from somewhere, and it could be that taxe foncière increases to make up the deficit.
Also, don’t confuse ‘inhabited’ with ‘inhabitable’. The basic rule is that taxe d’habitation is payable on inhabitable properties, regardless of how long you spend there during the year.

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