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High fonciere and habitation taxes


Simon

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Hello,

I wonder if anyone can help. We bought a rural house as a holiday home in Creuse in March 2005 and when we bought it we asked the notaire roughly what we could expect to pay in tax. He told us that since it was not our permanent residence we should expect to pay around 300 euros a year for both the fonciere and habitation taxes together. 

Sure enough our first bills at the end of 2006 were for 364 euros including 116 for the tv licence. However, in 2007 we received demands totalling 1039 euros (which did not include the tv licence) and just now in 2008 for 1213 euros (including the tv licence)

My questions if anyone can help are:

1. Is there a discount for holiday homes - ie they got my first years bill right but likely applied the full amount in subsequesnt years incorrectly

2. If not, does anyone know if the Creuse suffered an unusually high tax increase that could explain it.

3. If a mistake has been made, will I get a refund..?

My french is ok but not brilliant so before I speak to the tresor (badly) I wonder if anyone can give me some advice. I also read in this months Living france that these taxes should be considerably lower than council tax - turns out they are roughly the same at current exchange rates.

thanks

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1. No. In fact it has been quoted elsewhere that a higher rate is applied to second homes.

2. High levels of increased taxation seem to be normal throughout France, many resulting from updating the notional valuations, many of which seem to have been artificially low in previous years.

3. Probably for the current year but doubtful for previous years, unless you make a very big fuss (in French). Equally though, you would not be expected to pay arrears resulting from the house being undervalued previously.

What you read in Living France seems based on one of those common myths, that may have held good in years gone by but don't apply today. What is certain is that the regional, even local, variations in property taxation are incredibly wide, much wider than in England. Houses in some places might well cost a lot less in property tax than you would pay in council tax (things like the number of bathrooms seem to play a major part), but elsewhere they could easily cost considerably more. So overall there is probably not much difference, as you have found.

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[quote user="Simon"]1. Is there a discount for holiday homes - ie they got my first years bill right but likely applied the full amount in subsequesnt years incorrectly[/quote]

No. There is NO discount for second homes. I'm sorry that I can't help you with the rest, unless of course what has happened is that the property had been improved by the previous owner and the improvements (bathrooms, additional habitable space etc) had only been picked up on the transfer of the property to you.

(Will beat me to it by 1 minute ...)

Regards

Pickles 

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[quote user="Pickles"][quote user="Simon"]1. Is there a discount for holiday homes - ie they got my first years bill right but likely applied the full amount in subsequesnt years incorrectly[/quote]

No. There is NO discount for second homes. I'm sorry that I can't help you with the rest, unless of course what has happened is that the property had been improved by the previous owner and the improvements (bathrooms, additional habitable space etc) had only been picked up on the transfer of the property to you.

(Will beat me to it by 1 minute ...)

Regards

Pickles 

[/quote]

 This happened to a friend, he bought an old house that had been extensively renovated by the vendor(french), apparently without planning permission. Some time after the purchase he recieved a letter from the tax office saying that the description of the property in the sale documents did not tally with their records,and enclosing a questionaire asking for details of room sizes, uses, condition, and provision of services etc. His next tax foncier and habitation bills were up by about 4x.

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[quote user="Simon"]

My french is ok but not brilliant so before I speak to the tresor (badly) I wonder if anyone can give me some advice.

[/quote]

The Trésor Public is the office which collects the taxes. If you have any queries you should go to the office which issues the demand. This may or may not be your tax office but it will be shown on the demand.

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If the property was new or newly converted, then it is possible that there was an initial  two year exemption from Foncieres, though I think the size of the increase make this explanation unlikely.

If you examine the 2006 bill and compare it with the later examples , you will be able to see whether it is the valuation of the property, or the rate of tax that has increased.

Did you buy any chance receive any letters from the tax authority seeking information about the property? For example, have you been required to complete the dreaded form H1?

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I didn't expect so many responses...so quickly..thanks to all.

I haven't been asked to provide any details on the property to the tax office - it was rented for quite a while before we bought it and the work we have done since has been largely cosmetic. If they misvalued the property then it must have been for a long time. Would there be any mileage in writing to them to ask if they have made a mistake..?

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It won't do any harm, you might get a reduction.

You don't necessarily have to fill in forms or notify anybody to trigger a revised assessment. There has been a lot of revaluation in our part of France, much of it done by external inspection (or even, possibly, from aerial photographs). One friend with two adjoining houses (one his own, the other for letting) had an enormous increase; he queried it and got a reduction, but the increase was purely because he had been paying far too little, on both houses, in the past. Whereas for our own house, in the next commune, we had always seemed to pay a lot more than others, but this year had only a very small increase. Our valuation had obviously been right all along.

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Simon I would be careful here as something similar has happened to us, though it was not altogether unexpected as we have carried out extensive refurbishment. TF went from 1500 euros to nearly 5000 euros. I asked my accountant if we had any right of appeal his thinking was as follows:

In January 2009 there is some sort of change in the tax law and we should appeal the 5000 at the end of next year. If we were to appeal it this year and say they reduced the amount to 3000 euros they would then apply this rate to the prevous 3 or 5 years, not sure which, and tax you retrospectively. If you appeal the amount end of next year they will only be able to tax you for 2008 and 2009 ie they are no longer allowed to apply them retrospectively for a 3 or 5 year period.

Sorry I am unable to be more precise but the meeting with the accountant was unscheduled and tho my french has improved my fiscal vocabulary is somewhat limited.

Good luck

Wilko

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