Everything you need to know about French resident tax on your second property

By the end of 2020, 80% of French people will no longer pay la taxe d’habitation, or local resident tax, on their primary residence.  Secondary residences, however, will not be exempt.  How are local resident taxes on secondary properties calculated and how does this compare to main residences?  Bercy Infos outlines everything you need to know…

What is la taxe d’habitation?

French local resident tax, or taxe d’habitation, is collected to help the local government, with the amount varying from one commune to another.  This amount also varies based on property characteristics (size, for example) and taxpayer status (income, number of dependents, etc.).

Does it concern secondary residences?

Second homeowners must pay local resident tax, even if he or she already pays a local resident tax on their primary residence.  The tax reform brought on by 2018 finance laws will only cut taxes d’habitation on primary residences, not secondary ones. 

How is it calculated?

The tax is calculated based on the theoretical annual rental value of the property, including any outbuildings, in conjunction with rates set by local authorities.  There are, however, differences between the way la tax d’habitation is calculated for secondary residences, compared to primary residences:

1. Any allowances (for individuals of modest means or individuals with large families) or income-based caps that can be granted for a principle residence are not applicable to secondary residences.
2. In municipalities that tax vacant properties, which can sometimes lead to the establishment of an increase in local resident tax on secondary homes, it is possible to request an exemption from these increases (see below).  Taxes on vacant properties do not apply to secondary residences, even if this residence is lived in throughout the year.

How can I apply for an exemption?

If your secondary residence is affected by this increase you can apply for an exemption, provided you fall into at least one of the following categories:

1. If, for professional reasons, you are forced to live somewhere other than your main residence, you can apply for an exemption on this secondary residence.
2. If you still legally use and own your principal residence but more permanently reside in a care facility, you can apply for an exemption.
3. If you cannot use your secondary residence as a main dwelling for reasons beyond your control (for example, a construction project taking place in or around this property), you can apply for an exemption.

Source: Devez-vous payer la taxe d’habitation pour votre résidence secondaire ?