How is property tax calculated?

Who is liable and what the tax covers

Property tax on built properties is levied annually on built properties (Article 1380 of the CGI). It is owed by the person who owns the property on 1 January of the tax year, whether it is occupied by the owner, let or vacant. In the event of a sale during the year, the tax legally remains the responsibility of the owner as at 1 January, even if an apportionment with the buyer may be provided for in the deed.

The base of the tax is the cadastral rental value, which represents the theoretical annual rent the property could produce if it were let under normal conditions.

• Annual tax on built properties (Article 1380 of the CGI).
• Owed by the owner as at 1 January of the year.
• Based on the property's cadastral rental value.

The calculation: rental value, revaluation and the 50% allowance

The cadastral rental value is revalued each year by applying a national flat-rate coefficient, provided for in Article 1518 bis of the CGI, indexed to price movements. This coefficient is set each year by the Finance Act: do not treat a given percentage as final.

For built properties, the tax base is then equal to the revalued cadastral rental value less a flat-rate allowance of 50% (Article 1388 of the CGI), this allowance being deemed to represent the owner's costs of management, insurance, maintenance, repair and depreciation. This gives the cadastral income, which serves as the basis of calculation.

The practical formula is therefore: tax base = revalued cadastral rental value x 50%.

• Annual revaluation of the rental value by a flat-rate coefficient (Article 1518 bis of the CGI).
• 50% allowance to obtain the tax base (Article 1388 of the CGI).
• Tax base = revalued cadastral rental value x 50%.

Applying local rates and ancillary taxes

The tax base is multiplied by the overall rate voted each year by the local and regional authorities (municipalities and inter-municipal bodies). These rates vary strongly from one municipality to another, which explains significant differences in property tax for comparable properties located in different municipalities. No uniform national rate exists.

Ancillary taxes collected together with property tax generally add to this, notably the household waste-collection tax (taxe d'enlèvement des ordures ménagères, TEOM), based on the same base as property tax. Exemptions and allowances exist, for example for new buildings subject to conditions or for certain households depending on their situation; check the mechanisms and their conditions for your situation and the year concerned.

Overall formula: property tax = (revalued cadastral rental value x 50%) x rate voted by the authorities.

• Base x overall rate voted by local authorities (varying by municipality).
• Possible ancillary taxes, including the TEOM based on the same base.
• Possible exemptions and allowances subject to conditions, to be checked case by case.