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Local Taxes in France: Little-Known Exemptions for Expats

Money & taxes

Every year, autumn in France brings the arrival of property tax bills: the taxe foncière (property ownership tax) and, for some, the taxe d'habitation (residence tax) on second homes. With local authorities constantly raising rates, the bill can quickly become a painful burden on household budgets. However, the Code général des impôts (CGI / French General Tax Code) is packed with relief mechanisms, rebates, and total exemptions that taxpayers often overlook. Whether you are an owner-occupier, a landlord facing rental vacancies, or a non-resident with a pied-à-terre in France, discover the legal levers available to legitimately reduce your local taxes.

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1. The Property Tax on Built Properties (TFPB): Exemptions Based on Personal Circumstances

Property tax is not inevitable, even when you own your primary residence. French law provides several cases of total exemption or capping based on the taxpayer's personal and financial situation.

Total exemption for seniors and people with disabilities

According to Article 1390 of the Code général des impôts, certain owners qualify for an automatic exemption from the taxe foncière on their primary residence. The eligible groups are:

For individuals over 75 and AAH recipients, the tax household's income from the previous year (N-1) must not exceed a specific Revenu Fiscal de Référence (RFR / reference fiscal income) threshold. For the 2024 tax year, the 2023 RFR must not exceed 12,455 € for the first unit of the family quotient (part de quotient familial), increased by 3,326 € for each additional half-unit (demi-part).

Capping the property tax based on income

If you do not meet the conditions for a total exemption, Article 1391 B of the CGI provides a capping mechanism for the taxe foncière on your primary residence.

This scheme applies to taxpayers who are not subject to the Impôt sur la fortune immobilière (IFI / Real Estate Wealth Tax) and whose RFR for the previous year is below certain thresholds (for example, 29,120 € for a single tax unit, increased by 6,805 € for the first additional half-unit). The portion of the taxe foncière that exceeds 50% of the household's income is then cancelled.

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2. Property Tax Exemptions Linked to Property Characteristics

French tax law encourages the ecological transition and new constructions through temporary or permanent tax incentives.

The temporary two-year exemption for new builds

In accordance with Article 1383 of the CGI, new constructions, reconstructions, and building additions are exempt from taxe foncière for the 2 years following their completion.

Please note: following recent budget reforms, municipalities (communes) and intercommunal bodies have the authority to cancel or limit this exemption for their share of the tax (for example, limiting it to 40% or 90% of the taxable base, or eliminating it entirely for properties not financed by state-assisted loans).

Exemption for energy renovation works

Article 1383-0 B of the CGI allows local authorities to vote for a temporary exemption (either total or partial at 50% or 100%) from the taxe foncière for properties completed before January 1, 1989, that have undergone equipment expenditure supporting the energy transition.

To qualify, the amount of expenses paid by the owner must exceed:

This exemption applies for a duration of 3 years and cannot be renewed during the 10 years following the end of the exemption period.

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3. Tax Relief for Rental Vacancy: The Landlord's Secret Weapon

Many buy-to-let landlords are unaware of this: if your rental property remains empty against your will, you can request a rebate (dégrèvement) on your taxe foncière.

The strict conditions of Article 1389 of the CGI

Article 1389 I of the Code général des impôts states that taxpayers can obtain a rebate on their taxe foncière in the event of the vacancy of a building normally intended for rental. Three cumulative conditions must be met:

1. The vacancy must be independent of the taxpayer's will (the requested rent must not be excessive, and active steps to find a tenant must be proven).

2. The vacancy must last for at least 3 months.

3. The vacancy must affect either the entire building or a part of it that can be rented out separately.

The rebate is calculated prorata temporis (proportionately) from the first day of the month following the start of the vacancy until the last day of the month in which the vacancy ended.

Concrete calculation example: Marie's case

Marie owns an apartment that she rents out for a monthly rent of 900 €. Her annual taxe foncière is 1,200 €.

The tenant leaves the property on January 31st. Despite publishing advertisements on specialized websites and hiring a rental agency (proving her good faith), Marie does not find a new tenant until July 15th.

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4. The Residence Tax on Second Homes (THRS): Special Cases and Exemptions

While the taxe d'habitation on primary residences was completely abolished for all taxpayers in 2023, it remains fully in force for second homes. However, several little-known exemptions exist.

Automatic exemptions

Certain situations allow you to escape the taxe d'habitation on a second home, notably:

Claiming unhabitability of the property

The taxe d'habitation is only due on furnished properties fit for habitation. If you own a second home that is completely unfurnished on January 1st of the tax year, and this lack of furniture makes the property uninhabitable, you are not liable for the tax.

Please note: the simple absence of furniture is not always sufficient if the tax administration (administration fiscale) deems that the property has basic amenities (water, electricity, heating) allowing immediate occupation with minimal furniture. You must prove that the property requires major renovation works that prevent effective occupation.

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5. Practical Steps: Step-by-Step Guide to Claiming Your Exemption

Do not expect the tax office to apply these exemptions automatically. In most cases, the taxpayer must actively request them.

1. Gather supporting documents: Collect the documents proving your situation (income tax notice showing your RFR, proof of receiving the AAH or ASPA, RGE-certified invoices for energy works, agency contracts, and rental listings for vacancy claims).

2. Draft the request for rebate or exemption: Write a registered letter with acknowledgment of receipt (lettre recommandée avec accusé de réception - LRAR) or log into your personal space on the impots.gouv.fr website.

3. Use the secure messaging system: In your personal space on impots.gouv.fr, click on "Messagerie sécurisée" (Secure Messaging), then "Écrire" (Write), and choose the section "Je signale une erreur sur le calcul de mon impôt" (I am reporting an error in my tax calculation) > "Ma demande concerne la taxe foncière" (My request concerns property tax) or "la taxe d'habitation" (residence tax).

4. Respect the claim deadlines: For both taxe foncière and taxe d'habitation, the claim must be submitted no later than December 31st of the year following the one in which the tax bill was issued (for example, for the 2024 taxe foncière, you have until December 31, 2025).

5. Follow up on your case: The tax administration theoretically has 6 months to respond. A lack of response within this timeframe constitutes an implicit rejection, opening up the right to appeal to the Tribunal administratif (Administrative Court).

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6. Mistakes to Avoid

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FAQ: Frequently Asked Questions About Local Tax Exemptions

I am a non-resident in France; can I benefit from the property tax exemption for over-75s?

No. The taxe foncière exemption linked to age and income (Article 1390 of the CGI) applies exclusively to primary residences. By definition, a tax non-resident owns a second home in France, which is therefore ineligible for this scheme.

I bought an old property and am carrying out major renovations. Can I be exempt from property tax?

Yes, under certain conditions. If the works are so extensive that they amount to a reconstruction (for example, keeping only the facade and completely rebuilding the interior), the property can be treated as a new build and benefit from the 2-year exemption under Article 1383 of the CGI. Additionally, if the works target energy performance, the exemption under Article 1383-0 B may apply if voted for by the municipality.

What is the tax on vacant properties (TLV) and how can I avoid it?

The taxe sur les logements vacants (TLV) applies in high-demand areas (zones tendues) to unfurnished habitable properties that have been vacant for at least 1 year on January 1st of the tax year. To avoid it, you must prove that the property cannot be occupied long-term (requiring works costing more than 25% of the property's value to make it habitable) or that the vacancy is involuntary (such as active but unsuccessful efforts to rent or sell).

My adult student child lives in my secondary studio apartment. Am I liable for the residence tax?

If the studio is your child's primary residence (and they have their own tax household or are attached to yours), no taxe d'habitation will be due, as the tax on primary residences has been abolished. This is subject to the property being declared as the student's primary residence to the tax services.

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Summary

Legal information for guidance only, not personalised legal advice. For your specific situation, ask your question free of charge on AvocatAI — answers based on French law, in your language.

Content reviewed by the AvocatAI legal editorial team

This article is provided for information only and is not legal advice. Consult a lawyer for advice tailored to your situation.