Property tax surcharge: Where in France second-home owners are liable for extra taxes
Local authorities in certain parts of France are entitled to place an extra property tax on second homes - here's how the system works and how to find out if your area is introducing such a rule.
France's householders' tax - taxe d’habitation - has been almost completely phased out, but there is one group that it still applies to; second-home owners.
Not only do second-home owners still have to pay the tax, an increasing number of communes are imposing a 'surcharge' on second homes which increases the bill by up to 60 percent.
The government has given local authorities in areas where there is a housing shortage the power to increase taxes on second homes in order to fund more affordable housing for locals and an increasing number of communes are choosing to use this power.
READ ALSO Second home or main address? French property tax rules explained
Towns and cities with more than 50,000 inhabitants and “a marked imbalance between supply and demand for housing” are known as zones tendues (troubled zones) and may increase their portion of the taxe d'habitation by between five and 60 percent.
Taxe d'habitation is based on the rental value of dwellings, payable on all furnished premises used for residential purposes, in accordance with article 1407 of the CGI (French General Tax Code).
The size of your bill will therefore depend on the value of your home, and whether your local authority has imposed a surcharge for second homes.
The aim of the surcharge is to encourage second home owners to either sell the property, or rent it out long term.
Almost 10 percent of France's housing stock is second homes, the vast majority owned by French people.
Earlier this year, we reported that the Mediterranean glamour resort of Saint-Tropez hopes to raise €3 million a year for new local housing by increasing the taxe d’habitation on second homes by 60 percent from next year.
They are far from the only town to do this. Paris decided to raise its portion of the taxe d’habitation bill on second homes by 60 percent in 2022; while some 255 towns and cities across the country - of the 1,136 eligible to do so - have taken up the option of boosting their rates.
READ ALSO Second-home owners: What French taxes do you need to pay?
Last year, city councils in cities such as Bordeaux, Lyon, Biarritz, Arles and Saint-Jean-de-Luz voted to increase the tax to the maximum 60 percent.
Authorities must be able to demonstrate significant second-property rates and that property purchase and rental prices are higher than the national average in order to be eligible.
New rules, which do away with the 50,000 lower limit on population, come into force in 2024 (delayed from 2023) and could see the tax rises implemented in up to 4,000 additional towns.
According to the Direction générale des finances publiques (DGFiP) a total 22.4 percent of the municipalities authorised to levy a surcharge on taxe d’habitation for second homeowners did so in 2022.
The full list of towns able to impose higher taxe d’habitation rates is here.
READ ALSO Reader question: Who has to pay France’s ‘vacant property’ tax?
Exemptions
There are some. You may be able to claim exemption from taxe d’habitation on second homes if:
- Your professional activity is close to the second home and obliges you to live there;
- Your primary residence is a long-term care facility, meaning your former primary residence is now your second home;
- The property is uninhabitable for a reason outside of your control. For example, if work is needed to make it habitable. If this is the case - and it's not uncommon of you have bought a property as a restoration project - you need to register it as uninhabitable with your local tax office. You will usually then benefit from a reduced or zero tax bill for a limit period - in most areas two years is the maximum time you can declare the property uninhabitable.
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France's householders' tax - taxe d’habitation - has been almost completely phased out, but there is one group that it still applies to; second-home owners.
Not only do second-home owners still have to pay the tax, an increasing number of communes are imposing a 'surcharge' on second homes which increases the bill by up to 60 percent.
The government has given local authorities in areas where there is a housing shortage the power to increase taxes on second homes in order to fund more affordable housing for locals and an increasing number of communes are choosing to use this power.
READ ALSO Second home or main address? French property tax rules explained
Towns and cities with more than 50,000 inhabitants and “a marked imbalance between supply and demand for housing” are known as zones tendues (troubled zones) and may increase their portion of the taxe d'habitation by between five and 60 percent.
Taxe d'habitation is based on the rental value of dwellings, payable on all furnished premises used for residential purposes, in accordance with article 1407 of the CGI (French General Tax Code).
The size of your bill will therefore depend on the value of your home, and whether your local authority has imposed a surcharge for second homes.
The aim of the surcharge is to encourage second home owners to either sell the property, or rent it out long term.
Almost 10 percent of France's housing stock is second homes, the vast majority owned by French people.
Earlier this year, we reported that the Mediterranean glamour resort of Saint-Tropez hopes to raise €3 million a year for new local housing by increasing the taxe d’habitation on second homes by 60 percent from next year.
They are far from the only town to do this. Paris decided to raise its portion of the taxe d’habitation bill on second homes by 60 percent in 2022; while some 255 towns and cities across the country - of the 1,136 eligible to do so - have taken up the option of boosting their rates.
READ ALSO Second-home owners: What French taxes do you need to pay?
Last year, city councils in cities such as Bordeaux, Lyon, Biarritz, Arles and Saint-Jean-de-Luz voted to increase the tax to the maximum 60 percent.
Authorities must be able to demonstrate significant second-property rates and that property purchase and rental prices are higher than the national average in order to be eligible.
New rules, which do away with the 50,000 lower limit on population, come into force in 2024 (delayed from 2023) and could see the tax rises implemented in up to 4,000 additional towns.
According to the Direction générale des finances publiques (DGFiP) a total 22.4 percent of the municipalities authorised to levy a surcharge on taxe d’habitation for second homeowners did so in 2022.
The full list of towns able to impose higher taxe d’habitation rates is here.
READ ALSO Reader question: Who has to pay France’s ‘vacant property’ tax?
Exemptions
There are some. You may be able to claim exemption from taxe d’habitation on second homes if:
- Your professional activity is close to the second home and obliges you to live there;
- Your primary residence is a long-term care facility, meaning your former primary residence is now your second home;
- The property is uninhabitable for a reason outside of your control. For example, if work is needed to make it habitable. If this is the case - and it's not uncommon of you have bought a property as a restoration project - you need to register it as uninhabitable with your local tax office. You will usually then benefit from a reduced or zero tax bill for a limit period - in most areas two years is the maximum time you can declare the property uninhabitable.
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