The income thresholds granting a reduction or exemption from the local French property taxes have been increased for 2010.

All owners of property in France are liable to two local property taxes – the taxe d’habitation and the taxe foncière.

In certain circumstances, households are eligible for a reduction in the level of the taxes, or complete exemption from them.

We cannot go into all of these grounds in this article, but focus on the recent changes to the income thresholds for those eligible on this basis.

Different rules apply to each tax, although in each case, the main income thresholds that apply for complete exemption, for those eligible on low income grounds, are the same.

In the case of a single person, the maximum net income to be eligible for complete exemption from the taxes is €9,876, as notified to you on your French income tax return.

In the case of a couple the maximum net income is €15,150.

These sums are higher if you have children or other dependant adults in the family.

However, only certain types of household are eligible for complete exemption. So even though you may quality on grounds of income, you may still not qualify for complete exemption.

Taxe d'Habitation

In relation to the taxe d'habitation the main groups who qualify for exemption provided they meet the above income thresholds are those over 60 years of age, disabled persons, or those in receipt of Revenu de solidarité active de base (RSA).

In addition, widowed persons are eligible for complete exemption, irrespective age, but subject to the usual test of resources.

Accordingly, if you do not fall into one of the eligible groups, you cannot claim complete exemption from the taxe d'habitation, whatever the level of your income.

Nevertheless, if you do not fall into one of the qualifying groups, but your income is less than €23,224 per year for a single person or €32,940 for a couple (with further increases for children), then you receive a reduction in the level of the tax, depending on the level of your income and family circumstances. The formula for calculating the reduction is complex, so we shall refrain from trying to give you an example here! You can see an example in our Guide to Local Property Taxes in France.

This reduction or exemption in your taxe d'habitation is something that is carried out automatically each year by your local tax office on the basis of your income tax return.

However, if in doubt, pop along to your local tax office to discuss your circumstances. This applies particularly to disabled persons, where we have found that the rules are subject to local interpretation and not applied in a consistent manner across the country.

Properties that are empty as they are unfit for human habitation are not subject to the tax, although you need to advise the tax office this is the case, with a supporting letter from the local mairie.

Taxe Foncière

In relation to the taxe foncière the grounds for exemption due to low income are narrower.

Thus, the main groups eligible are those of at least 75 years of age, or disabled persons, provided they also qualify on income grounds.

The same income thresholds for exemption to the taxe d'habitation are used, although the reduction in tax that is granted for the tax d'habitation for those on higher incomes does not apply in relation to the taxe foncière.

There are also more general exemptions and reductions that are not dependant upon the level of your income, eg, new build, energy conservation works.

You can read more about French local property rates, and the exemptions and reductions that apply, in the link below to our Guide to Local Property Taxes in France.