Following a number of delays, the new French Residence Tax declaration is now finalized.
The deadline for giving the information to the authorities passed on August 10, 2023.
But what now? And what if you are a property owner but haven’t made the declaration?
Read our easy guide to the latest developments.
What is the French Residence Tax declaration?
The new French Residence Tax declaration requires that everyone who owns a property in France tells the tax authorities whether it’s their primary or secondary residence.
The reason for the change follows the cancellation of the old taxe d’habitation (French Residence Tax) for those living full-time in France in a primary residence.
But if you own a second home here, you’re still liable to pay the tax if you are not fiscally domiciled in France.
This applies to a lot of 56Paris clients, and is of specific interest to Americans with a second home in Paris.
The declaration is a simple form to fill-in on the government tax website – something we reported in a blog earlier this year.
Nothing has changed. The tax for second homes is not new, only the way to report your status to the French government.
This new system is just a digital update to the process, replacing the old-fashioned paper questionnaires.
What if I’ve missed the deadline?
If you own a French property and have yet to provide your details to the tax authority website, do not panic!
The latest reports suggest that 81% of owners have provided their occupancy status. That still leaves 19% yet to do so.
For various reasons, including website downtime and a late influx of traffic on the site, the deadline has been extended three times.
Due to these issues, the tax authority is allowing some flexibility. A translation of the update on their website states, “We will naturally show kindness towards latecomers in good faith, with no penalties given this year.”
This means although the official deadline has passed, there will be no fines until the start of 2024. So there is time.
However, we advise all owners to fill-in the form as soon as possible or risk paying the €150 fine.
How do you define a first or second residence?
The main purpose of the form is to tell the government whether you use your property as a primary or secondary residence.
In France, a primary residence is your main home. The place where you live most of the time – or more than six months a year.
A secondary residence would be your ‘holiday home,’ including a furnished rental investment.
Either way, you must declare the status of your property as part of the new French Residence Tax declaration.
The government will then use this information to determine which taxes you’re liable for.
I’ve filled in the form, what next?
If you’ve already completed the French Residence Tax declaration online, you can sit back and relax.
There is nothing else to do at this stage.
Next, the authorities will use the information to determine what tax is due. If you are a foreigner with a second home in France, this is likely to be the taxe d’habitation.
But it is worth noting that this tax, along with the property tax, remains extremely low compared to many other capital cities – including London and New York.
From 2024, owners need only report changes in their circumstances. This is due before July 1st of each year.
If there are no changes since your last declaration, you are exempt from making the declaration again.
Any more questions? We’re here to help
While our field of expertise lies in real estate – not taxes – we are still on hand to offer help should you need it, and introduce you to a tax professional.
All information given in this blog is correct at the time of writing and is a guide only. At 56Paris, we always recommend consulting an accountant or tax professional for personalized advice on your own assets and tax situation.