Buying or building premises in France gives rise to two distinct taxes: property tax (taxe foncière), due every year by the owner, and development tax (taxe d’aménagement), due once when a building is constructed or extended. For a foreign company, these local taxes are easy to overlook, and costly when miscalculated.
This guide sets out the differences between the two taxes, the filings to respect and the checks worth making. It is aimed at companies setting up in France, often supported by a French VAT agent for their VAT and filing obligations.
Two taxes, two logics
Property tax is an annual, recurring tax linked to owning the asset. Development tax is a one-off tax linked to a construction operation. The two are frequently confused, although the filings, taxpayers and deadlines differ.
Property tax: the owner on 1 January
It is owed by the owner of the property on 1 January of the year, whether or not the owner occupies it. Its base is the cadastral rental value, to which rates voted by local authorities apply. The valuation method differs by type of property: business premises, industrial premises, housing. The category applied therefore has a direct impact on the amount.
Development tax: a filing after the works
It applies to construction, reconstruction or extension operations subject to planning permission. Since the reform of its administration, it is declared to the tax authorities after completion of the works, within 90 days, through the online property-management area.
The completion declaration also triggers the update of property tax: the two topics are linked and should be handled together.
Useful checks
| What to check | Why it matters |
|---|---|
| Category and valuation method of the property | They determine the rental value and therefore the tax |
| Surface areas and comfort items retained | An error repeats year after year |
| Temporary exemptions | Possible for new buildings or certain areas |
| Landlord / tenant split | Set by the lease: it decides who actually bears the tax |
For companies leasing premises, the clause re-charging property tax to the tenant is a negotiation point not to be neglected.
When to ask for relief
Prolonged vacancy of business premises, a surface-area error or a demolition not taken into account may justify a claim. It must be filed within the deadlines specific to local taxes, generally until the end of the year following the one in which the tax was issued. After that, the claim is time-barred even when the error is proven.
To go further, read our article on local taxes and when to ask for relief.
Points specific to a foreign company
- appoint a contact in France to receive notices and respect deadlines;
- budget for development tax in any construction project;
- check that the property tax notice reaches the right address;
- align these obligations with your VAT registration in France and other filings.
A practical checklist before you buy or build
A few questions are worth answering before signing or starting works, because the answers shape both the budget and the filings that follow:
- Who will be the owner on 1 January, and which entity should hold the property?
- Is the project subject to planning permission, and therefore to development tax?
- What category and surface areas will be declared once the works are complete?
- Does the lease re-charge property tax to the tenant, and on what basis?
- Who in France will receive the tax notices and monitor the deadlines?
Keeping a file with the planning documents, the completion declaration and each tax notice makes any later claim far easier to support.
How Hanoutax can help
Hanoutax, a French VAT agent for foreign companies, reviews your notices, supports your development tax declarations and files claims when justified. We coordinate these topics with your VAT obligations so that you have a single contact.
Discover our property tax and development tax service and our page on the fiscal representative in France for your VAT obligations.
FAQ
Who pays property tax: the owner or the tenant?
The legal taxpayer is the owner on 1 January. The lease may however provide for a re-charge to the tenant.
Is development tax annual?
No, it is due once, on a construction, reconstruction or extension operation subject to authorisation.
Where is development tax declared?
With the tax authorities, after the works are completed, through the online property-management area. The deadline is 90 days.
Until when can property tax be challenged?
Generally until the end of the year following the year of issue. The exact deadline should be checked against your notice.
Can a foreign company be liable?
Yes, as soon as it owns property in France or carries out a construction project subject to authorisation.
A real-estate project in France?
Related reading
Informational content, not legal advice. The rules that apply depend on your situation.
