Since January 1, 2024, a new tax measure has been in place that affects owners of second homes. It involves an increase in the taxe d’habitation (council tax), a significant change of between 5% and 60%, which requires a clear understanding to avoid unpleasant tax surprises. In this article, our experts explain this change and its implications in detail.
What is taxe d’habitation?
Historically, the taxe d’habitation is a local tax levied on all property owners. Prior to January 1, 2024, it applied to both primary and secondary residences. However, since that date, taxe d’habitation has only applied to second homes.
This tax is levied by local authorities (communes, départements and regions), and is used to finance part of local public services such as schools, roads, health services, cultural facilities, etc.
What has changed since January 1, 2024?
Not 1149, but 3700 communes will now be able to increase the property tax on second homes within their boundaries by up to 60%. This measure is designed to rebalance the tax burden and encourage more efficient use of housing in areas where demand for second homes is high.
Who is affected by this increase?
All owners of second homes are affected by this increase in taxe d’habitation. Whether you own a family home, a seaside apartment or a house in the countryside, this tax measure will impact you, provided it has been implemented by your commune.
How is this increase calculated?
The calculation of the taxe d’habitation is based on the cadastral rental value of the property, i.e. the theoretical rental value that the property could generate if rented out. This value is then multiplied by a tax rate set by the local authority.
Increases in taxe d’habitation can vary from one commune to another, as each local authority has the power to set its own tax rate. Some communes may therefore decide to increase the taxe d’habitation on second homes more than others.
How do you manage this increase?
It’s essential for owners of second homes to react to this increase in council tax. Here are a few tips to help you manage this change:
- Find out about the tax rate in your commune: Consult the information provided by your town hall or on your commune’s website to find out the current tax rate for second homes.
- Include this expense in your budget: Incorporate the increase in council tax into your annual budget so that you’re not caught unprepared by this additional expense.
- Consider financial management solutions: If the increase in council tax represents a significant burden for you, explore financial management solutions such as renting out your second home during periods when you’re not occupying it, or setting up a savings plan to anticipate this expense.
At Cazmate, we understand the challenges you face as a second-home owner, especially when it comes to financial management. Don’t hesitate to get started for free on Cazmate to help you simplify the management of your property and optimize your expenses.
