TDF and TDH Question

[retirement planner]

Another question if you don't mind. I wonder if someone could give their

experience of Taxe d’ habitation and Taxe fonciere on their homes in France. 

In the UK we have been lucky enough to have enjoyed no increase  ( apart from a

few pounds a year) in council tax and television licence for the last four years

now.

This is in contrast to the previous years when council tax went up by a substantial amount each year.  Have you seen large increases in these two taxes while

in France or do they increase by a reasonable percentage each year?  and who

sets these taxes, is it local, department or national?  Just trying to find out what

we may expect when making the move.

Thanks 

Julie.

[richard51]

You really need to ask what the current taxes are on the houses that you are looking at in order to get a base level.

What will happen to them in the future will probably depend on the politicians rather than historic precedence.

Can't see them going down though.

[YCCMB]

Plan for increases. The size of these could be of any magnitude. Bits are fixed by the individual commune, others by the larger local authority and others higher up the administrative chain.There's no logic to them at all.

We've seen our UK council tax remain the same or even decrease over the period we've owned our French home. Our combined taxes in France actually increased above the level we pay in the UK a couple of years ago and continue to rise. We currently pay significantly more in France than on our UK house, the two being of comparable size, but the former in the middle of nowhere, and the latter just outside the M25.

Some contributors on here have very cheap taxes, others very expensive. It's not just down to location in general, but to the individual property!! If you are a permanent resident and French taxpayer, you do get a few breaks that bring the bill down, however, but that doesn't prevent the year-on-year increases and with the shortfalls in Government funding and budgets and more onus being placed on communes to cut back on expenditure and balance their books, I'd bet these increases will continue for the foreseeable future.

[Pickles]

As others have noted, the trend with TdH and TF is upwards. All areas have seen and are seeing shifts of responsibilities and competences from central government to local government, and many of these are unfunded. That puts pressure on TdH and TF. I am not up to date with the Taxe Professionel situation (this affects businesses), but my understanding is that this has been abolished and not fully replaced - this was another source of funds for the locality. We have seen above-inflation increases every year for the last 12 years IIRC.With each year's TF and TdH bill you get a comparison with the previous year's bill for the various components and the overall total. Where once the state could be relied on or cajoled into pouring money into local projects ~(eg tramways etc), it is now less inclined to do so, meaning that a higher proportion of these costs have to be met by local residents. Also some localities have ill-advisedly entered into "toxic" loan agreements which will increase their levels of debt in the future and the costs of servicing that debt.

[EuroTrash]

The taxes are set by the commune each year when they fix their budgets and do their financial planning. So it will all depend how indebted the commune is, how good it is at balancing its finances, what income it has from other sources and what expenditure it expects in the coming year. There are factors that are within the commune's control and the commune has to try to strike a balance between keeping the taxes down but also providing a good quality of life for residents, with services for the elderly and vulnerable, efficient rubbish collection (though that's sometimes charged separately), sports facilities, maybe a library, a pleasant environment with good road surfaces, flowers, etc etc etc, (although for instance if it has to undertake major civil engineering works for health and safety reasons, it has to budget for them). Then there are factors outside its control, such as inherited debt that has to be paid off, how much it receives from the state which as said tends to decrease year by year, how many people that live there actually contribute - if it's a commune with an elderly and not well off population, only a small percentage actually pay taxe d'habitation so the burden on them is greater - etc.

There is a website at http://www.contribuables.org/argus-des-communes/

where each commune is rated for various factors, including their ability to control the property taxes. You could check out the commune where you are considering buying.

[halfblind]

[quote user="Pickles"] I am not up to date with the Taxe Professionel situation (this affects businesses), but my understanding is that this has been abolished and not fully replaced - this was another source of funds for the locality.

[/quote]

The Tax Professionel has been replaced by the CFE ( Cotisation Foncier des Enterprise) and has impacted our gite business. Whereas Gites were previously not charged TP they are now charged CFE and this is based on the TF value of the property. Makes it difficult as its not turnover or profit based.

[EuroTrash]

My impression is that there is more transparency and more accountability over local taxes in France than in the UK. As I recall, or in my experience at least, in the UK the general feeling over taxes was very much 'them versus us' - the council plucks a figure out of the air, the residents' gut reaction is to moan about it and pay up grudgingly. In France, again in my experience, I find that there is a lot more civic pride, the residents are more aware of and more interested in how their money is spent, and the commune takes their views into account. Obviously nobody wants taxes to go up but residents do also realise that if they want the village to look nice and they want a decent level of facilities and social provision, it has to be paid for. A few years ago there was a big hullaballo because there was heavy snow and the roads were impassable for a week or so. Some people started saying that it was scandalous, and the mayor said OK we can buy a snowplough, it will cost X€, that would increase the taxes by X% for the next X years and we might use the snowplough a handful of times during that period, do you want us to buy a snowplough or not? When it was put like that, people stopped moaning.

[idun]

ET, what a reasonable place you live in. Since the change at the elections, all I have had heard about is people going mad about what the new council is proposing to spend stuff on......... and sometimes what it is not prepared to spend money on. A big village with lots of factions was my old village![:-))]

[EuroTrash]

We do have quite a forceful mayor. At the local elections earlier this year somebody went round writing 'Dictateur!' across his face on the posters. But he got in again with a comfortable majority, Most people feel that he is firm but fair, and certainly the property taxes barely increased during his last mandate. In fact the rubbish collection tax decreased slightly. Before that under the previous mayor, taxes went up significantly each year - and the town's debts increased too.

[Pickles]

[quote user="halfblind"][quote user="Pickles"] I am not up to date with the Taxe Professionel situation (this affects businesses), but my understanding is that this has been abolished and not fully replaced - this was another source of funds for the locality.

[/quote]

The Tax Professionel has been replaced by the CFE ( Cotisation Foncier des Enterprise) and has impacted our gite business. Whereas Gites were previously not charged TP they are now charged CFE and this is based on the TF value of the property. Makes it difficult as its not turnover or profit based.

[/quote]

Thanks very much for the clarification: I think that CFE is lower than the old TP (for those that paid it), but from what you are saying, CFE has a wider scope and applies to a wider range of situations.

[NormanH]

In our case there is an additional administrative layer the 'Agglomeration' which also takes a bite of the cherry, but that is in larger places.

One counter-intuitive feature is that poor run-down towns with an impoverished population may well have a high TF as the few people who do pay; pay for all the others, where as the TF in a more attractive place may not be all that high.

This leads to the situation where the TF in Béziers is higher than that in central Paris, since there there are so many people and businesses paying...

[EuroTrash]

Sadly, that's a very true point.

A town with a lot of empty shops and closed down factories, where all the signs point to it having lost a lot of revenue from business taxes in recent years, may have particularly high property taxes because the infrastructure is likely to have been planned in more prosperous times, so that in effect it's now 'living beyond its means' with high running/maintenance costs and inherited debts to pay off.

[Sprogster]

My understanding is that there is an ongoing process in France to bring property valuations up to date for TF assesment purposes, as they had not been increased for many years. As a result it is expected that this will have an additional upward pressure on French property taxes.

[retirement planner]

Thanks to you all for your comments on this. We had read before about the

“toxic debt” some areas had. Is there any list of where these areas

are available at all ?  We somehow guessed it would always be an upward trend,

but as no-one has complained too bitterly about their own cases, we suspect that

there are no horrendous rises received.

Agents don't seem to publish the tax rates in the sales literature, so I

guess this has to be asked for on each property.   So when rates rise, is it a %

increase across all property type ranges, or do they load some types more than

others?

Thanks also Euro-trash for your link, as there is only football on tonight,

I will have a look through there then.

Julie

[EuroTrash]

Here's another link for you to look at - it's a couple of years out of date but it lists every commune in France, and you can play around and put them in different orders according to various criteria - compare, contrast and understand how vast the differences can be.

When they reassess the property taxes, it is literally done on a property by property basis. Each owner is required to complete a form giving the measurements of the habitable area, and the impots can come and measure up. The reassessment can also reflect changes in the neighbourhood, changes in the desirability of the property and also undeclared improvements or extensions that may have been made to that particular property that result in an increase in tax. In theory, some properties might see their tax reduced - but in practice I suspect very few do.

Don't forget that the rentable value of the property underpins all the calculations, so the most desirable properties in the commune that would command the highest rent, should also attract the highest property taxes. This may have got out of synch over the years with changes in the provision of neighbouring facilities and changes in the condition of the property, so it won't be a % increase across all properties - that would defeat the object of the exercise, which is to bring the values up to date but also to readjust and realign.

[suein56]

[quote user="EuroTrash"]Here's another link for you to look at ... [/quote]

Sounds interesting, but I cannot see the link, have I missed it ?

Sue

[EuroTrash]

Oops.

http://www.capital.fr/immobilier/special-impots-locaux/le-palmares-2012-des-impots-locaux-ville-par-ville

(scroll down to the bottom)

[idun]

Taxe d'hab is dependent on income and family circumstances too for french residents, so that would affect any figure you ascertain.

[EuroTrash]

It is, but if the figures the OP was talking about in their other post are any indication to go by, they're not going to be in line for any reductions on the grounds of low income ;)

[Pommier]

I think that what Idun was saying was don't rely on the amount being paid by the seller being the same as the buyer will pay ie the seller might be getting a huge income related reduction.

[idun]

Yes, that is what I wanted to say. [:D]