2 August 2023 update : due to a third of property owners still not having complied with their obligation by the new deadline, and technical difficulties experienced with the reporting tab within the online tax portal, the French government has now pushed the deadline again, to 10 August, and confirmed that they will take a lenient approach to the issue of fines, and potentially not seek to apply them until January 2024 to owners who wilfully ignored their reminder letters
In the past few years France has been working on phasing out its taxe d’habitation (occupancy tax) for all properties physically occupied by their owners or tenants, leaving only the taxe fonciere (land tax) as its yearly property tax.
However, for holiday homes or properties that are never occupied (vacant properties), there will still be a need to pay an additional tax, which will be either the taxe d’habitation, or taxe logement vacant, depending on whether the property is occupied from time to time but is not a main home, or left completely vacant.
In order to apply the correct tax regime, the French government is requiring all property owners, both persons and companies, wherever they reside in the world and whatever their nationality, to confirm the status of their properties as of 1st January 2023, and the deadline for this is 30 June 2023.
The information to be declared will depend on what the tax office already knows, and the owner’s specific circumstances, but they should be expected to at least declare on which basis the property is occupied and the identity of the occupants. Thankfully the French government has already clarified that this will be a one-off declaration rather than a yearly one, which will only need updating in case of a change of circumstances. It is however, estimated that 34 million property owners will be obliged to respond.
The declaration must be done through the online tax portal impots.gouv.fr (the service opened on 23 January). It is not yet clear as to whether those without a tax portal, or who are not comfortable enough with technology to use one, will be offered alternative means of declaration (such as a paper declaration as used for the French TV licence) or if reminders to declare will even be sent in the post.
If alternative means are not available, it will be necessary for each owner to check whether their online tax account is already available (which can be done by going onto the portal website and entering your tax number – numéro fiscal). If it is not, they will need to contact their local tax office with the relevant ID in order for it to be activated.
The French government has already published a helpful step by step guide of how to use the declaration service on the portal which can be downloaded here. However, it is likely that there will be delays and difficulties with set-up, and making declarations, plus the tax offices will be inundated with requests for rectification when the wrong tax regime has been applied and tax bills are received in the last quarter of the year.
It is uncertain whether there will be some leniency applied to cancel taxes raised when they shouldn’t have been due to the owner being late or unaware of this new obligation, or whether they will be left to pick up the cost of not making the deadline. The possibility of applying fines for not complying with this reporting obligation has also been provided for.
If you are confused as to whether these new requirements apply to you, you are unsure about compliance, or you feel you need assistance in English to liaise with the tax office on your behalf, please do not hesitate to contact our French Team who will be happy to help.
