Real estate taxation in France: second homes and vacant housing

Real estate taxation in France: second homes and vacant housing
french real estate taxation


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If you have an unoccupied home or a second home in France, your real estate taxation may increase. The increase in the vacant housing tax and the housing surcharge for second homes are on the agenda of the 2023 Finance Bill. Read on to find out…

Real estate taxation and vacant housing

Homes deliberately left empty by their owners are considered a scourge in some tourist towns where locals are struggling to find accommodation.

In order to combat this trend, the 2023 Finance Act includes an amendment that will make it possible to increase by one third the amount of the tax on “housing voluntarily unoccupied” either for at least twelve months on 1 January of the tax year, or occupied for less than 90 consecutive days per year.

This Vacant Housing Tax (TLV) applies to unfurnished properties in areas designated as “under pressure” with more than 50,000 inhabitants, i.e. where rental demand is higher than supply.

Under review, the amendment would like to change the TLV to a rate of 17% of the rental value of the housing in the first year then to 34% the following, compared with 12.5% and 25% currently.

Good to know: Vacant housing that is not in an “under pressure” area may be subject to the Council Tax on Vacant Housing (THLV).

Extension of the housing surcharge for second homes

Also in the government’s sights are second homes, which likewise exacerbate the housing difficulties of local people.

At a time when the council tax disappears on 1 January 2023 for main residences, it remains relevant for second homes and will even be amplified.

Indeed, an amendment, voted on at first reading, to the 2023 Finance Bill, marks the extension of the number of municipalities to which the surcharge on secondary homes can apply, from 1,140 to 5,000 municipalities.

In cities where this surcharge is applicable, the increase in the council tax on second homes may vary from 5% to 60%, on the mayor’s decision.

But, after discussions between the MP at the origin of the measure, Xavier Roseren and Bruno Le Maire, as well as Gabriel Attal, it would seem that the deadline for implementing this surcharge from 2023 onwards was too short, since the municipalities had until 28 February 2023 to deliberate. A decree should therefore be published in the first half of 2023 to indicate to the municipalities that they have an additional period of time (until 1 October 2023) to vote on a resolution for their 2024 budget.