Taxe d'Habitation in France: Who Still Has to Pay?

The progressive phase-out of the taxe d'habitation (residence tax) on primary residences, a long-promised reform finalized in 2023, has left a wave of confusion in the minds of millions of taxpayers in France. While many believe they are completely done with this local tax, the legal reality is more nuanced: the taxe d'habitation has not entirely disappeared from the French fiscal landscape. Between second homes, vacant properties, and new reporting obligations, discover exactly who still has to pay, how the amounts are calculated, and the essential steps to take to avoid penalties.

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The Legal Framework: The End of the Residence Tax on Primary Homes, But Not for All

The reform of local taxation, initiated by the 2018 Finance Act and completed by the 2020 Finance Act, deeply modified the Code général des impôts (CGI / French General Tax Code).

Article 1407 of the Code général des impôts sets out the principle of the taxe d'habitation. Since January 1, 2023, pursuant to Article 1408 of the same code, a total and permanent exemption from the taxe d'habitation applies to all taxpayers, regardless of their income, but solely for their primary residence.

On the other hand, the tax is expressly maintained for other categories of real estate. Article 1407, I, 2° of the CGI states that the taxe d'habitation remains applicable to:

• Second homes (furnished).
• Furnished premises occupied privately by companies, associations, and private organizations that do not fall within the scope of the cotisation foncière des entreprises (CFE / corporate property tax).

At the same time, the taxe sur les logements vacants (TLV / tax on vacant homes), governed by Article 232 of the CGI, or the taxe d'habitation sur les logements vacants (THLV / residence tax on vacant homes), provided for in Article 1407 bis of the CGI, apply to unfurnished properties that have been unoccupied for a certain period of time.

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Who Still Pays the Taxe d'Habitation in 2024?

Today, the taxe d'habitation mainly concerns two very distinct situations: owners of second homes and owners of vacant properties.

1. Owners of Second Homes

Any person (owner or usufruitier / usufructuary) who has a second home at their disposal on January 1 of the tax year is liable for the taxe d'habitation sur les résidences secondaires (THRS / residence tax on second homes).

• The taxation criterion: The property must be furnished and provided with sufficient furniture to allow actual habitation. It does not matter if you only spend two weeks a year there; as long as the property is habitable on January 1, the tax is due.
• The surcharge on second homes: Article 1407 ter of the CGI authorizes municipalities located in a zone tendue (high-demand housing area where there is a marked imbalance between housing supply and demand) to apply a surcharge on the municipal share of the taxe d'habitation on second homes. This surcharge can vary from 5% to 60%. With the expansion of this scheme in 2024, more than 3,600 municipalities now have the right to apply this surcharge.

2. Owners of Vacant Properties

If a property is not furnished but remains empty, it does not escape taxation.

• The Taxe sur les Logements Vacants (TLV): This applies in municipalities located in zones tendues for properties that have been vacant for at least 1 year as of January 1 of the tax year. Its rate is 17% for the first year of taxation and 34% for subsequent years.
• The Taxe d'Habitation sur les Logements Vacants (THLV): This can be established by municipalities outside of zones tendues. It applies to properties that have been vacant for more than 2 years as of January 1.

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Applicable Exemptions and Tax Relief

The legislature has provided strict exceptions allowing taxpayers to escape the taxe d'habitation on second homes or the surcharge.

Exemptions Related to Personal or Professional Situations

According to Article 1414 B of the CGI, you can request an exemption from the surcharge on the taxe d'habitation or from the tax itself in three specific cases:

1. Professional obligation: If you are forced to reside in a dwelling distinct from your primary residence for professional reasons (for example, a job-related tied accommodation or a pied-à-terre close to your weekly workplace).

2. Long-term care facility accommodation: Elderly or disabled people who leave their primary residence to enter a specialized long-term care facility (such as an EHPAD / nursing home) can benefit from an exemption for their former home, subject to income conditions.

3. Causes beyond the taxpayer's control: If the property cannot be used as a primary residence for a reason independent of your will (for example, a property requiring very heavy works to make it decent or compliant with standards, rendering it uninhabitable).

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Concrete and Numerical Examples

To better understand the financial impact of these rules, let us analyze two common situations.

Example 1: Jean's Second Home in Nice (Zone tendue with surcharge)

Jean has his primary residence in Lyon. He also owns a 50 m² apartment in Nice, which he uses as a second home.

• The valeur locative cadastrale (cadastral rental value) of this apartment is set by the tax administration at €3,000.
• The taxe d'habitation rate voted by the municipality of Nice is 20%.
• The municipality of Nice applies a 60% surcharge (the legal maximum) on second homes.

Calculation of the base tax:

$$\text{Base tax} = €3,000 \times 20\% = €600$$

Calculation of the surcharge:

$$\text{Surcharge} = €600 \times 60\% = €360$$

Total amount due by Jean:

$$\text{Total} = €600 + €360 = €960 \text{ (excluding state management fees of approximately 1% to 3%)}$$

Example 2: Marie's Vacant Studio in Bordeaux

Marie owns an unfurnished studio in Bordeaux (a zone tendue). This property has been empty of any tenant and furniture since June 1, 2022. As of January 1, 2024, the property has therefore been vacant for more than one year.

• The cadastral rental value of the studio is €1,500.
• The rate of the Taxe sur les Logements Vacants (TLV) for the first year of taxation is 17%.

Calculation of the TLV due by Marie in 2024:

$$\text{Amount of TLV} = €1,500 \times 17\% = €255 \text{ (to which a 9% management fee is added)}$$

$$\text{Total to pay} \approx €278$$

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Practical Steps: How to Declare Your Real Estate?

Since 2023, the Direction générale des Finances publiques (DGFiP / General Directorate of Public Finances) has implemented a strict reporting obligation to identify precisely how properties are occupied. Every owner (individual or legal entity) must comply with this procedure under pain of penalties.

Here is the step-by-step procedure to complete your declaration:

1. Log in to your personal space: Go to the official website impots.gouv.fr and log in with your tax number (numéro fiscal) and password.

2. Access the dedicated service: Click on the "Biens immobiliers" (Real Estate) tab located in the upper navigation bar.

3. Verify the list of your properties: The screen displays all the built real estate properties you own. If any surface area or description details seem incorrect, you can send a correction request via the secure messaging system (this does not block the declaration of occupancy).

4. Declare the occupancy: For each property displaying the status "Déclaration attendue" (Declaration expected), click on "Déclarer". You must indicate:

• The occupancy status (primary residence, second home, rented property, property occupied free of charge, vacant property).
• The identity of the occupants (last name, first name, date and place of birth for individuals; corporate name and SIREN number for legal entities).
• The occupancy period (start date and, if applicable, end date of occupancy).
• The monthly rent amount excluding charges (optional, but requested for rented properties).

5. Validate and keep the receipt: Once the information is entered, validate your declaration. A PDF summary is generated; keep it safe.

Important note: This declaration only needs to be completed once. You will only have to renew it in subsequent years if a change in situation occurs (moving out, new tenant, sale).

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Deadlines, Amounts, and Key Figures to Remember

To avoid late payment penalties and properly budget for your local taxes, keep these essential benchmarks in mind:

• January 1: The annual reference date to assess the occupancy status of the property and determine who is liable for the tax.
• June 30: The annual deadline to complete or update the occupancy declaration in the "Gérer mes biens immobiliers" (Manage my real estate) space in the event of a change of situation that occurred during the previous year.
• €150: The flat-rate fine applicable per property for which the occupancy declaration has not been submitted, or contains voluntary omissions/errors (Article 1770 terdecies of the CGI).
• November / December: The period for receiving tax notices (avis d'imposition) for the taxe d'habitation on second homes and the tax on vacant properties.
• December 15: The usual deadline for paying the taxe d'habitation (extended by a few days, generally to December 20, in the case of online paperless payment).

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Mistakes to Avoid

Managing local taxation can quickly become complex. Here are the most common pitfalls to avoid:

• Forgetting to declare a change of tenant on January 1: If your tenant leaves the property on December 31 and you do not report it, the tax administration could claim the taxe d'habitation from you personally as a second home or vacant property.
• Confusing an empty property with a furnished property: If you leave furniture (table, bed, chairs, hotplates) in a property that you cannot manage to rent out, the tax authorities will classify it as a "second home" and not a "vacant property". The standard taxe d'habitation will apply, which is often more expensive than the tax on vacant properties.
• Neglecting the occupancy declaration on the pretext that nothing has changed: Even if the initial declaration was made in 2023, make sure that no computer glitch has reset your status. A quick check on your online space will save you the €150 fine.
• Thinking that not receiving a paper notice exempts you from paying: The DGFiP is generalizing paperless communication. Monitor your email inbox and your online personal space in the autumn so you do not miss the payment deadline and incur a 10% surcharge.

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FAQ: Frequently Asked Questions about the Taxe d'Habitation

My student child occupies a studio that I own, who pays the tax?

If the studio constitutes your child's primary residence (as a student), they benefit from the total exemption of the taxe d'habitation for their primary residence. You simply need to declare their occupancy (free of charge or via a lease) in your "Gérer mes biens immobiliers" space. No taxe d'habitation will be due, either by you or by them.

I put my property up for seasonal rental (Airbnb), am I liable for the taxe d'habitation?

Yes. If you rent out a furnished property on a seasonal basis while reserving its exclusive enjoyment outside rental periods (for example, to stay there for a few weekends), you remain liable for the taxe d'habitation on second homes. On the other hand, if the property is exclusively intended for tourist rental all year round without you being able to stay there, it may be exempt from taxe d'habitation but will then be subject to the Contribution Foncière des Entreprises (CFE).

How do I prove that a property is genuinely uninhabitable to avoid the tax?

To be exempt from the tax on vacant properties or the taxe d'habitation, you must demonstrate that the property requires major works (generally amounting to more than 25% of the property's market value) to be decent and habitable (lack of heating, dangerous electrical network, degraded structural work). You must provide contractor quotes, invoices, or an expert report to the tax administration in support of your claim.

I sold my property during the year, do I have to pay the taxe d'habitation pro-rata?

No. Unlike the taxe foncière (property tax), for which the notarized deed of sale almost always provides for a prorata temporis reimbursement between the buyer and the seller, the taxe d'habitation is not legally split. It is the person who is the owner (or tenant for second homes) on January 1 who is liable for the entirety of the tax for the whole year.

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Summary

• Primary residence: Total and permanent exemption from the taxe d'habitation for all taxpayers since 2023.
• Second homes: The taxe d'habitation remains applicable and can be surcharged by 5% to 60% in municipalities located in zones tendues.
• Vacant properties: Subject to the TLV (in zones tendues after 1 year of vacancy) or the THLV (outside zones tendues after 2 years).
• Reporting obligation: All owners must declare the occupancy status of their real estate properties under pain of a €150 fine per premises.
• Key date: The occupancy status is strictly assessed as of January 1 of each tax year.

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.