If You Are Considering Buying Property in Paris From America or Elsewhere, You Are Probably Wondering How Much Property Tax Will Cost You. Let's Explore.
All property owners are liable for the property tax ("taxe foncière"), which is calculated based on various factors.
🥐 How is the Property Tax Calculated?
The property tax is a tax levied on the cadastral rental value of real estate. Its calculation is complex and relies on several factors.
First, the cadastral rental value is determined by tax authorities and corresponds to the theoretical rental value of the property, i.e., the rent the property could generate if rented. This rental value is periodically reassessed to account for the evolution of the real estate market.
Once the cadastral rental value is determined, it is subject to deductions that vary depending on the nature of the property. For example, primary residences benefit from larger deductions than secondary residences or non-residential properties. Additionally, certain exemptions may apply based on the owner's geographical location or the use of the property, such as exemptions for individuals over 75 years old.
After accounting for deductions, the net rental value is multiplied by the tax rate set by the municipality where the property is located.
In addition to the municipal rate, there may be additional rates set by other local authorities, such as the department or region.
Finally, the property tax may also be subject to various additional taxes and fees, such as the household waste removal tax or the tax on commercial surfaces. These taxes are generally calculated based on the cadastral rental value of the property.
🥐 The Property Tax in Paris
In Paris, the property tax is at 13.5%, compared to an average of 41.61% in major French cities. In 2023, despite an impressive increase in the property tax of about 52%, Paris remains low in the ranking of French property tax rates.
This exceptionally high increase in Paris property tax was due to the elimination of the residence tax ("taxe d'habitation") by the Macron government, coupled with inflation, to which cadastral rental values are indexed.
🥐How Much Property Tax Would You Pay in 2024 For a Parisian Main Residence (rough estimate):
40m2 (430 square feet) apartment : approximately 850 Euros annually
80m2 (860 square feet) apartment: approximately 1600 Euros annually
100m2 (1076 square feet) apartment: approximately 2000 Euros annually
🥐 When is the Property Tax Owed?
The property tax is owed by the owner of the property as of January 1st of the tax year, and it is typically paid during the month of October. Owners have the option to pay in monthly installments.
Note: I always ask the seller or realtor to show me the current Property Tax Statement from the onset so that my clients know what to expect early on.
Happy property hunting, and may your French real estate journey be as smooth as a buttery croissant! 🥐 🇫🇷
As always, I love to read your comments and answer your questions.
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