Property tax: 5 things to know about the tax notice, up sharply this year

Like every year, September rhymes with the arrival of local taxes. But this year, the sharp rise in the property tax may surprise taxpayers. In an attempt to make this moment less painful, Le Figaro has answered the most frequently asked questions on the subject.

The property tax is a tax which concerns real estate, whether unbuilt land or built housing, on January 1 of the tax year. It can therefore take two forms: that for built properties (dwellings, parking lots...), and that for unbuilt properties (fields, ponds, gardens...).

In the vast majority of cases, this tax concerns the usufructuary or the owner of the property. Indeed, the property tax goes to the person who enjoys the income from a property or who lives there. Conversely, a tenant or a bare owner is not concerned, except in exceptional cases; the fact that the name of the bare owner appears on the property tax notice is therefore not to be taken as an obligation to pay.

However, the situation can in some cases be reversed. In the case of a dismemberment, the notary can draw up an agreement which specifies the rules and the rights for the usufructuary and the bare owner; this agreement may indicate that it is the bare owner who will be liable for property tax, contrary to the usual rules. The usufructuary will then be entitled to claim it or to prove to the tax department that he does not have to pay it. Note that the occupant, whoever he is, must for his part pay the tax on household waste.

Finally, in the specific case of joint ownership, given that several people own part of the property, each person concerned must pay part of the property tax.

The amount of property tax depends on the cadastral rental value of the property, that is to say the theoretical rent that the owner could draw from it. A 50% discount is then applied to the amount.

For 2023, the cadastral rental values ​​are revalued according to the Harmonized Consumer Price Index (HICP), indexed to inflation; this results in a 7.1% increase in the calculation basis for all properties. This increase is a minimum: to this is added the increase in tax rates set by local authorities. These can indeed vary, and are likely to increase sharply this year: 19% of municipalities with more than 40,000 inhabitants will increase their rate in 2023.

The property tax is of course based on the square footage of your home, but additional elements come into play. “Comfort elements”, for example, such as sanitary and heating installations, add fictitious square meters to the property tax base. 'taxation. “Any element of additional comfort or embellishment that enhances the property can increase the rental value. This is the case if you create a bathroom that did not exist, additional toilets, a bathtub instead of a shower... In the cases mentioned, there is no “increase in habitable surface area but elements of comfort which are taken into account in the general assessment of the property”, explains the General Directorate of Public Finances, DGFiP. These criteria are inherited from the old method from 1970. At the time, these elements were considered luxurious and determined the classification of housing.

In general, additional items built that add value to the property increase the property tax. The construction of a non-dismountable swimming pool, for example, leads to an automatic increase: a pool of 30 square meters can lead to an increase of 200 euros. However, there are many exceptions: if a carport is generally included in the calculation of property tax, it is not counted if it measures less than 5 square meters on the ground, or if it is a a kit for a period of less than 3 months per year and not fixed to the ground. Similarly, some works do not modify the tax. Thus, the transformation of a living room into another (living room into a bedroom) does not affect the tax, since no element of comfort is added.

The property tax concerns almost all property owners, but several situations allow total exemption for taxpayers: being a beneficiary of the Allowance for Disabled Adults (AAH), being over 75 years old on January 1 of the tax year, or hold the Solidarity Allowance for the Elderly (ASPA) or the Supplementary Invalidity Allowance (ASI). For people between the ages of 65 and 75 on January 1 of the tax year whose reference tax income meets a threshold, you can still obtain an automatic relief of 100 euros. In addition, a reduction can be obtained if the property is unoccupied, but supporting documents must be provided to the tax authorities.

There are also temporary exemptions. On the property side, new homes are exempt for 2 years. Similarly, old homes that have undergone energy saving work benefit from a 5-year exemption. New buildings for use as a main residence financed at 50% by State-assisted loans benefit from a 10-year exemption, subject to certain income conditions. A declaration to the public finance center within 90 days after the work is however required to claim abatements.

However, these exemptions are subject to conditions. The tax cap implies that the property is the main residence, that the taxpayer has not been subject to real estate wealth tax (IFI) the previous year and that the reference tax income does not exceed certain thresholds. . Furthermore, the exemption does not cover the household waste collection tax (TEOM). Some communities offer exemptions if your home is energy efficient or exposed to particular risks. To find out about the exemptions specific to your municipality, it is necessary to inquire at the local tax office.

You should know that the owners are required to pay the property tax in one go. The dates differ depending on the payment method: for online payments, the validation deadline is October 21, 2023, while mail payments must be finalized by October 16. In the event of late payment, an increase may be applied to the tax, up to 10% if payment is not made within 45 days of the date of collection, according to the Public Service website. In the case of a monthly payment request, the change will only be effective for the following year.