Property tax (taxe foncière)
The property tax on built properties (TFPB) is an annual local tax due by the owner or bare-ownership holder of real estate as of January 1 of the tax year. It is calculated on the cadastral rental value of the property, weighted by rates set by local authorities (municipality, intercommunality, department). It is a deductible expense under the actual-expense rental income regime.
Key points
- Payable by: the owner or life-interest holder as of January 1 (not the tenant, except for waste-collection levy).
- Tax base: cadastral rental value of the property, revised annually by a statutory coefficient.
- Rates set each year by local authorities — can vary substantially by municipality.
- Temporary exemptions possible: new constructions (2 years), energy-efficient housing under conditions.
- Deductible from rental income under the actual-expense regime (not deductible under micro-foncier or for a primary residence).
Frequently asked questions
How is property tax actually calculated?
The amount is calculated by multiplying half of the cadastral rental value (gross value × 50%) by the sum of the rates set by the various local authorities. The rental value is adjusted each year by a national statutory coefficient set in the finance act. The bill can therefore change year to year even if the property itself is unchanged.
Can property tax be passed on to the tenant?
In principle, property tax is the owner's responsibility and is not a recoverable charge from the tenant, with limited contractual exceptions. Only the waste-collection levy (TEOM), which appears on the same bill, can be passed on to the tenant. Any contractual clause transferring the property tax itself to the tenant is unenforceable in a residential lease.
Why must property tax be factored into a rental financing plan?
Property tax often represents 1 to 2 months' rent depending on location, materially reducing the net rental yield. A broker building a financing plan must include it in annual charges to compute the real savings effort and verify that the net return justifies the intended debt-to-income ratio.
In practice
Marc buys a three-room apartment in the Lyon area with a cadastral rental value of €6,000. With a base of €3,000 (50%) and combined local rates of 48%, his annual property tax amounts to approximately €1,440. Rented at €900/month, this represents 13% of gross annual rent — a line item his broker includes in the cash-flow projection.
Official sources
- Property tax on built properties (TFPB) · Service-Public.gouv.fr
- Housing and financing information · ANIL
- Mortgage credit (official guide) · Service-Public.gouv.fr