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Owners of French property ordered to declare occupation status

by LLP Staff Reporter
6th Feb 23 12:19 pm

Updates to property taxation legislation in France will see all local and overseas owners of property in the country under pressure to confirm the occupancy of their assets under the new Government rules.

France has been working on phasing out its taxe d’habitation (occupancy tax) for all properties physically occupied by their owners or tenants over the course of the last few years, leaving only the taxe fonciere (land tax) as its annual property tax.

However, with an additional tax still payable for holiday homes or properties that are either always vacant or infrequently occupied, the French government has called upon all proprietors to confirm the occupancy status of their buildings so that the correct tax regime can be applied.

On 1 January 2023, the French Government announced that a declaration as to how, if at all, a property is occupied, would become mandatory in order to dictate whether an owner would be liable to pay either taxe d’habitation, or taxe logement vacant (or neither of those), in respect of their French homes.

Regardless of where in the world the owners reside, if they are a private owner or involved with a company which itself owns assets in France, they will have until 30th June 2023 to declare their interests or risk the possibility of incurring fines for non-compliance.

Léa Maynard from Buckles explained: “The information that needs to be declared will depend on what the tax office already knows, and the owner’s specific circumstances, but they will be expected to at least declare on which basis the property is occupied and the identity of the occupants.

“Thankfully the French government has already clarified that this will be a one-off declaration rather than a yearly one, which will only need updating in case of a change of circumstances. It is, however, estimated that 34 million property owners will be obliged to respond.

Declarations must be done through the online tax portal impots.gouv.fr (the service opened on 23rd January). It is not yet clear as to whether those without a tax portal, or who are not comfortable enough with technology to use one, will be offered alternative means of declaration (such as a paper declaration as used for the French TV licence, now also phased out) or if reminders to declare will even be sent in the post.

Léa  added: “If alternative means are not available, it will be necessary for each owner to check whether their online tax account is already available (which can be done by going onto the portal website and entering your tax number – numéro fiscal). If it is not, they will need to contact their local tax office with the relevant ID in order for it to be activated.

“The French government has already published a helpful step-by-step guide on how to use the declaration service on the portal. However, it is anticipated that there will be delays and difficulties with set-up, and making declarations, plus it is likely that the tax offices will be inundated with requests for rectification when the wrong tax regime has been applied and tax bills are received in the last quarter of the year.

It is uncertain whether there will be some leniency applied to cancel taxes raised when they shouldn’t have been due to the owner being late or unaware of this new obligation, or whether they will be left to pick up the cost of not making the deadline. As such, we would advise that any English nationals affected by these rules act swiftly to avoid any unnecessary challenges.”

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