French Real Estate Tax Burden on Lower-Value Homes

Discover how taxe foncière disproportionately impacts owners of lower-value homes, costing up to two months of mortgage repayments in some regions.

In France, the property tax, known as taxe foncière, has become a rather burdensome affair for buyers of lower-value properties, disproportionately impacting their financial well-being. A recent report by the brokerage firm Meilleurtaux reveals that this tax can equate to as much as two months' worth of mortgage repayments in certain regions. In 2024, the average taxe foncière saw a notable increase of 10.8%, leaving many real estate owners scratching their heads and perhaps reaching for their wallets.

To put things into perspective, the average taxe foncière bill stands at €811 for an apartment and €1,019 for a house. However, in areas grappling with heightened housing demand, these figures can soar to alarming heights. The tax is calculated based on the dynamics of the local real estate market, taking into account sales values and rental prices within the commune. Consequently, in communes where rental pressure is more pronounced, the taxe foncière tends to escalate at a faster rate.

Interestingly, the findings from Meilleurtaux indicate that this tax burden is felt more acutely in less expensive areas. For instance, in locales like Perpignan or Nîmes, where real estate prices are relatively lower, the tax rate is proportionally higher, leading to a perplexing situation for homeowners.

Fortunately, there are avenues for relief. Property owners may apply for a reduction in their taxe foncière bill under certain conditions. If the tax exceeds 50% of their income, pertains to a rental property that has remained vacant for at least three months due to various reasons—be it the elusive search for a tenant, ongoing renovations, or damage—relief may be granted. Additionally, individuals aged between 65 and 75 with a taxable annual income below €11,885 may also qualify for a reduction.

Exemptions are available as well, providing further respite for real estate owners. For instance, homes less than two years old, properties that have undergone significant renovations, or those that have added extensions such as rooms, garages, or swimming pools may be exempt from the taxe foncière for a two-year period. Furthermore, individuals over 75 with a reference annual tax income below €11,885, as well as those receiving ASPA, ASI, or ANAH benefits, may also find themselves eligible for exemptions.

In summary, while the taxe foncière may seem like an unavoidable reality for real estate owners in France, understanding the nuances of this tax and the potential for reductions and exemptions can provide a glimmer of hope amidst the financial fog.