Civil law Tax law

Housing tax and property tax: What’s the difference?

The housing tax is a local tax claimed to any taxpayer since it has at his/her disposal a furnished apartment from 1st January of the tax year. It applies both to a house than an apartment purchased, leased or loaned by a parent or loved one.

housing and property tax

The property tax is claimed to all owners of an apartment, a house, a building land, a non-building land. It is established for the current year according to the situation of the taxpayer on 1st January. The property tax is due for all property held, whether used or not by their owners as a principal residence.

The housing taxes just as property taxes are calculated from the cadastral rental value of housing and outbuildings (garage, parking space, and courtyard). According to the code of taxes, “the rental value corresponds to the annual theoretical rent which could produce a developed or undeveloped property, if he leased under normal conditions”. The applicable rates are those voted by benefiting local communities.

For housing tax, the cadastral rental value is reduced individually by the action of various allowances required (family support) and optional (resource conditions, age, disability …). The value obtained after applying the abatement, called net rental value, serves as a basis for the calculation of the amount to be paid.

For property tax, rates differ according to whether the taxed goods are built or not built. Thus, the tax base is 50% of the cadastral rental value for built properties and 80% of the cadastral rental value for undeveloped land. In part, property tax consists of the removal of household waste. In the case of rental housing, the owner is entitled to pass this particular tax on his tenant.

The two local taxes are mainly used to finance the operating budgets of the local authorities (region, Department, community of communes, municipalities). The rates applicable are voted annually by local authorities according to their needs.

Local taxes: who pays what?
The payment of housing tax follows the following rules:

  • It is payable by all taxpayers: it concerns the principal residence be they owners or tenants;
  • It can granted from partial exemption (modest, disability income) or total (students living in university residences, the elderly in nursing homes, strictly business premises, etc.);
  • It is impossible to pay it twice. Only the situation on 1st January account.

The settlement of the property tax is subject to the following rules:

  • It is payable by all owners of a well-built or not built, used for personal, leased or loaned;
  • It applies to commercial, industrial or professional;
  • Exemptions are provided (persons aged over 75 non-taxable income, beneficiaries of a social minimum, new construction, etc.);
  • The owner may claim the tenant payment of the collecting tax of the household waste.

In summary, an owner’s principal residence must necessarily pay a housing tax and a property tax.