The Taxe d’habitation has officially been scrapped for main residences in 2023. However in order to find out which properties may still be subject to taxe d’habitation (second homes, rentals etc) and the tax on vacant lodgings, the French tax authorities are requiring all those who own their own homes, second homes or rental properties to do a new declaration before 1st July 2023.
Financial updates February 2023
By Katriona Murray-Platon
This article is published on: 19th February 2023
I’m so glad that February is here. After a long and cold January it’s so nice to see the bright sunshine and the mimosa flowers in my garden. That said January wasn’t too bad since I was able to get away for a lovely week in Gleneagles in Scotland for the Spectrum conference. It was a fun week of meeting with product providers, celebrating 20 years of Spectrum, highland games, walks in the Scottish countryside, and horse riding. If you thought the 2022 was a difficult year in the markets you were right. When I spoke to our product providers at our conference they told me that 2022 was one of the most difficult years they had ever experienced. Not only were equities down but the bond markets suffered too. No one can say what may happen in the future, but we can always hope, and already there are signs of improvement in 2023.
The Taxe d’habitation has officially been scrapped for main residences in 2023. However in order to find out which properties may still be subject to taxe d’habitation (second homes, rentals etc) and the tax on vacant lodgings, the French tax authorities are requiring all those who own their own homes, second homes or rental properties to do a new declaration before 1st July 2023. This includes properties held jointly, usufruitiers and properties within an SCI. This service is available on your online tax account from 1st January 2023 and the declaration has to be completed by 30th June 2023.
I had a go at doing this declaration on our own tax account and it is really quite easy to do. If you log into your account on the French tax website (impots.gouv.fr) , at the top there is a tab at the top with “Biens Immobilier”, you click on that and it will show all the properties you own, this will include any garages or out houses on your property. There should be a blue alert bubble saying how many declarations you have to do. You click on that and you will see exactly which declarations need to be done. Then you click on the option to declare your property. It will list the named occupants of the property, if nothing has changed then click on “aucun changement” (no changes) and then “valider” (approve) then it’s all done! The whole process took about 5 minutes, much less than the actual income tax return! In our case they listed our house and garage separately so I had two separate declarations to do for these. My husband is also a “nu proprietaire” of his mother’s house following the death of his father some 20 years ago. This house was listed but all we could do was consult the declaration, we didn’t need to do this declaration as his mother is the occupant of this property.
This declaration has to be done and there could be a fine of €150 per building for not declaring or for any mistakes or omissions on the declaration. If you have any questions you can contact the tax office via the messenger service by choosing the option “j’ai une question sur le service Biens Immobiliers” (I have a question on the property service).
The tax brackets have been officially increased by 5.4%. I wrote about the new tax brackets in my November Ezine but I will publish them again when we get closer to tax season. There is good news for parents with young children who go to a nanny or nursery, the amount of expenses allowed for the tax credit has finally been increased from €2300 to €3500 per child (making the total tax credit €1750 per child) and this will apply to your childcare expenses in 2022.
Further good news is that the savings accounts the Livret A and the LDDS, which did have a 2% interest rate have now been increased to 3%. The LEP now will have an interest rate of 6.1%. However bear in mind that the maximum deposit into the Livret A is €22950 and 3% of this is €689. The LDDS maximum balance is €12,000 at 3% this equals €360. Presuming you meet the income threshold, you can only put a maximum of €7700 which at a rate of €6.1% would earn you €470. So on €42650 of capital put into these savings account, you would earn €1519 fee from tax and social charges or 3.56%. Furthermore these amounts are paid yearly not monthly or quarterly so you will only receive these amounts on 1st January of next year.
Finally if you didn’t do any renovations or improvements to the energetic efficiency of your home in 2022 you can still do so in 2023, irrespective of your level of income. The renovation bonus or MaPrimeRenov’ has been extended until 31st December 2023 and the amount of financial assistance available has also been increased. To find out what you can do according to your income levels and what financial assistance you can receive, this document is useful: https://www.ecologie.gouv.fr/sites/default/files/19164_maPrimeRenov_DP_Janvier%202021.pdf It unfortunately dates from January 2021 so needs to be updated with the new amounts but it is still useful to give you a rough idea.
If you have any questions on any of the above or any other financial matters please do get in touch.