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PROPERTY

French property tax: How the one-off tax for building projects works

If you’re planning to extend your home in France, or add an extra feature such as a swimming pool, garage, garden shed or conservatory, you will likely be subject to the one-off building tax.

Published: 14 February 2024 16:55 CET
Updated: 3 March 2024 17:06 CET
French property tax: How the one-off tax for building projects works
Building work on your French property may attract an extra tax. Photo by Damien MEYER / AFP

The tax implications of an extension, or a swimming pool, to your property in France may not figure highly in many people’s calculations as they work out whether they can afford expensive home improvements.

Additions to your annual taxe foncière – and, for second homes, taxe d’habitation – bills are likely to apply.

Taxe foncière is calculated according to a complex formula that takes into account the rentable value of your home and multiples it by a rate set by your local authority – and one of the routinely welcomed side-effects of adding another bedroom, or a conservatory, or a pool is to do increase a property’s value.

Shed tax

But there’s something else to take into account – the one-off taxe d’aménagement, known as the ‘garden shed tax’. This tax is levied on building projects that extend or add a new amenity to a property. We’re talking home extensions plus swimming pools, garages, sheds, conservatories and similar.

Basically, if your home improvement project requires some form of building permission – a permis de construire or déclaration préalable de travaux – you’re likely to be in ‘garden shed tax’ territory.

Areas subject to the tax must be at least five metres squared, with – if included – a ceiling height greater than or equal to 1.8m. 

How it’s calculated

The value of the project is calculated either per unit or per metre squared of surface area – as long as the additions to a property has a surface area of at least 5 square metres. Where applicable, they must have a ceiling height greater than or equal to 1.8m.

Meanwhile, fixed values are placed on the following:

  • swimming pool (€258 / metre square);
  • ground-mounted photovoltaic panels (€10 / msq);
  • wind turbine over 12m high (€3,000);
  • outdoor parking areas (€3,000 per space, rising to €6,000 per space upon deliberation by the local authority).
  • pitch for tents, caravans and mobile leisure homes (€3,000);
  • Chalets and bungalows: €10,000 per pitch.

Pergolas, arbors and terraces are not subject to this tax.

Municipal, departmental and regional percentages rates are then applied. 

The annual rate of the municipal share generally varies from 1 percent to 5 percent. It may be higher.

The annual departmental share rate is limited to a maximum of 2.5 percent, while the rate of the regional share for the Île-de-France Regional Council is a maximum of 1 percent but varies department by department.

Value rise

The base value flat-rate rose 3.4 percent on January 1st, lower than the 8 percent increase in 2023, and the 7 percent jump in 2022.

The flat-rate value for 2024 is: 

  • €1,036 in Île-de-France;
  • €914 elsewhere.

The government has set up an online taxe d’aménagement simulator, but its calculations still appear to be based on 2023 rates. At least you’ll get an idea.

You must declare the elements necessary to calculate the tax simultaneously with your property declaration, within 90 days of completion of the work.

To do this, go to your account on the government’s tax website (impots.gouv.fr) and click on the Biens immobiliers tab. Use the formulaire de déclaration des locaux d’habitation form.

If your bill is less than €1,500, you are expected to pay in one instalment. If it’s greater than €1,500, you can pay in two instalments: the first within 90 days and the second nine months after completion of the work.

Are there exemptions?

Commonly, small constructions with a surface area of less than 5m2 are exempt, because they are not subject to planning authorisations. 

Meanwhile, some local authorities also exempt larger constructions, up to 20m2, if the are financed with a zero-interest loan. And many may also deduct 50 percent from the flat-rate value for certain extensions to main buildings.

What if I don’t declare?

Don’t think you can get away with not declaring your extension to tax authorities. 

The French inland revenue has been working with Google to develop software that analyses satellite pictures and compares them with land registry records to locate undeclared property improvements that may have gone under the radar.

It has also trialled using existing tools, such as Google Maps. In 2017 officials found some 300 undeclared swimming pools in Marmande, a town of around 20,000 people in Lot-et-Garonne, alone, allowing tax authorities to recoup €100,000 in unpaid taxes.

Two years later, 3,000 undeclared pools were discovered via Google Maps tech along the Atlantic coast and Côte d’Azur, and the Drôme.

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TAXES

Should I include my grown-up child in my French tax declaration?

Young adult children are often still financially dependent on their parents, and under some situations you can continue to claim them on your French tax declaration.

Published: 13 May 2024 13:16 CEST
Should I include my grown-up child in my French tax declaration?

As soon as a child reaches the age of majority – 18 in France – they are, in principle, subject to personal income tax and should file their own tax returns, even if they do not receive any income. 

But at this age many children still live in the family home, or are studying at university and are likely still financially dependent on their parents.

The good news is that, if a child is still dependent on their parents’ financial support, they can be included in the tax household, which leads to a number of tax benefits, depending on your situation.

This includes adult children away at university, who – for tax purposes – may still be considered to be dependent and ‘living at home’, even if they are away studying at the other end of the country.

If you are not sure whether you need to add an adult child to your tax return, officials at your local tax office will be able to help you.

READ ALSO Tax benefits of having children in France

When can you include your adult child on your French tax return?

A child over the 18 may be attached to their parents’ 2023 tax return (declarable in 2024) in the following cases:

  • your child was under 21 on January 1st, 2023;
  • your child was under 25 years of age on January 1st, 2023, and in full-time education either on January 1st, 2023 or December 31st, 2023.
  • Disabled children over the age of majority can be included on their parents’ tax declaration regardless of age.

If your adult child lives with you and is attached to your tax household, you can deduct a lump sum of €3,968 from your income on your declaration for 2023 earnings. According to the tax authorities, this amounts to the cost of board and lodging.

READ ALSO Explained: How to fill out the French tax declaration

“When the child’s accommodation covers only a fraction of the year, this sum must be reduced in proportion to the number of months concerned (…) Even if it is a lump sum, the amount deducted must be declared by the beneficiary”, the tax authorities’ website states.

Be aware, however, in situations where the parents are taxed separately (for example, if they have divorced), an adult child who is still financially dependent can only be attached to one or other tax household, not both.

How do I add an adult child to my tax declaration?

Since the introduction of the prélèvement à la source (withholding tax), you can add your child to your tax household online in your personal space on the impots.gouv.fr website by clicking on Actualiser suite à une hausse ou une baisse de revenus in the Gestion mon prélèvement à la source section.

READ ALSO: How to file your 2023 French income tax declaration

You also need to report it on the annual tax return, in the box provided for this purpose, section D on page 2.

If you prefer, you can also visit your nearest tax office, where officials will help you.

What you need to declare

If your adult child is attached to your tax household, parents must declare on their tax return any income that child received for the entire year (that’s income from 2023 on tax returns filed in Spring 2024).

READ ALSO EXPLAINED: How to get a ‘numéro fiscal’ and create a French tax account

The following incomes are exempt from income tax:

  • internship allowances and apprentices’ salaries, provided they do not exceed the annual minimum wage (€20,815 for income earned in 2023). Any amount earned over this is taxable;
  • Salaries of students aged 25 or under working student jobs, up to an annual limit of three times the monthly SMIC (€5,204 for income earned in 2023). Any amount earned over this is taxable.

What about student grants or scholarships – should we declare those?

That depends on the type of grant or scholarship. 

Specific research scholarships, for example, should be declared, but bourses allowing children from lower-income families to attend further education establishments should not. 

READ ALSO 10 tax breaks you could benefit from in France

If you are unsure whether you should declare a grant or scholarship, you can find out more according to your specific situations here, or visit your local tax office.

Financial aid for children on low income

Even if your child lives on their own and files their own returns, parents who provide monthly financial assistance to adult children up to the age of 25 can declare the sums paid up to a limit of €6,368 per year. This aid is fully deductible, but must be declared on your adult child’s tax return.

“You must keep all receipts for expenses, as they may be requested by tax authorities. If the parents are taxed separately, each parent can deduct expenses up to this limit,” the tax office website says.

Try it out

You can simulate calculations for your 2024 tax return, with and without any adult children added, using the tax office simulator.

READ ALSO How much tax can you expect to pay in France in 2024?

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