New obligations imposed upon legal owners of French residential property
15 March 2023
Nina Gurney, Director of Family Office at New Quadrant, considers recent changes to French occupancy tax (taxe d’habitation).
What has changed?
Since 2018, the French tax authority has been taking steps to lift increasing numbers of households out of liability to occupancy tax (taxe d’habitation). As a consequence, with effect from 1 January 2023, occupancy tax will apply only to second homes and vacant properties and will no longer apply to main residences.
To enable it to determine which properties will be subject to the occupancy tax and which will not, the French tax authority now requires all legal owners of French residential property to submit a declaration (declaration d’occupation) setting out the occupancy status of each of their French residential properties.
Who will be impacted?
The requirement to file a declaration applies to all legal owners, regardless of nationality, domicile, residence or tax residence. Those who already have a French tax number and have set up an online account (‘your personal space’ / ‘votre espace particulier’) on the French government website (https://www.impots.gouv.fr) can make the declaration via that online account. Those without a French tax number must apply for one and subsequently create an online account and make the declaration
How quickly do I need to act?
The deadline for making the declaration is 30 June 2023. There is a fixed penalty of €150 (one hundred and fifty euros) per property for failing to make a declaration or making an incomplete or incorrect declaration. In the event that any of the declared information changes, a new declaration will be required. Otherwise, the declaration need be made once only.
Are any further changes imminent?
In due course, towns in France that are situated in areas where there is a shortage of housing (zones tendues) will be entitled to levy a surcharge (of up to 60% of the occupancy tax). The application of this surcharge had been set to come into effect this year, 2023. However, the French government has recently announced that publication of the decree authorising the application of the surcharge has now been postponed until 2024.
Key take aways
- These changes impose on all legal owners of French residential property an obligation to file a declaration in respect of each such property
- The deadline for filing is 30 June 2023, failing which a penalty will be imposed
- Only those with a French tax number are able to file the declaration; acquiring a tax number may take some weeks
- In due course, an additional surcharge will likely apply
15 March 2023
Disclaimer: New Quadrant Partners is not qualified to advise on French law and the information set out in this note is for general information purposes only; it does not cover all circumstances and does not constitute legal advice.