In 2023, French property taxes are going to increase significantly, with the Île-de-France in the Paris metropolitan area having the highest percentage increase. This is largely because of the elimination of the occupancy tax (taxe d’habitation) and the impact of inflation on the assessor’s (cadastral) rental values that form the basis of the proposed assessments, as these taxes are typically indexed and increased with the overall inflation rate.
Accordingly, every French municipality (communes) will have to automatically increase their property taxes for 2023 by 7.1% over the prior year. These local municipal tax increases are in addition to the overall increase in property taxes nationally. The most significant increase in real property taxes will be in Paris with an estimated 62.7% year-over-year increase.
The following table shows the highest increases in property tax for all French cities with more than 40,000 inhabitants.
Property Tax Increases for the 191 Towns With More Than 40,000 Inhabitants
| Municipality | YOY Increase (2022–2023) | Local Percentage Increase | National Percentage Increase |
|
Paris |
+62.7% |
+51.90% |
+7.1% |
|
Meudon (Hauts-de-Seine) |
+44.7% |
+35.10% |
+7.1% |
|
Grenoble (Isere) |
+33.2% |
+24.40% |
+7.1% |
|
Bobigny (Seine-Saint-Denis) |
+26.9% |
+18.50% |
+7.1% |
|
Troyes (Aube) |
+22.5% |
+14.40% |
+7.1% |
|
Livry-Gargan (Seine-Saint-Denis) |
+22.2% |
+14.10% |
+7.1% |
|
Metz (Moselle) |
+21.5% |
+13.40% |
+7.1% |
Municipality
Paris
YOY Increase (2022–2023)
+62.7%
Local Percentage Increase
+51.90%
National Percentage Increase
+7.1%
Municipality
Meudon (Hauts-de-Seine)
YOY Increase (2022–2023)
+44.7%
Local Percentage Increase
+35.10%
National Percentage Increase
+7.1%
Municipality
Grenoble (Isere)
YOY Increase (2022–2023)
+33.2%
Local Percentage Increase
+24.40%
National Percentage Increase
+7.1%
Municipality
Bobigny (Seine-Saint-Denis)
YOY Increase (2022–2023)
+26.9%
Local Percentage Increase
+18.50%
National Percentage Increase
+7.1%
Municipality
Troyes (Aube)
YOY Increase (2022–2023)
+22.5%
Local Percentage Increase
+14.40%
National Percentage Increase
+7.1%
Municipality
Livry-Gargan (Seine-Saint-Denis)
YOY Increase (2022–2023)
+22.2%
Local Percentage Increase
+14.10%
National Percentage Increase
+7.1%
Municipality
Metz (Moselle)
YOY Increase (2022–2023)
+21.5%
Local Percentage Increase
+13.40%
National Percentage Increase
+7.1%
Source: Cabinet FSL
The impact of these unexpected increases and the scale of these changes is clearly demonstrated in the following graph. The increase in property taxes from 2010 to 2023 for towns with more than 100,000 inhabitants (excluding Paris) is shown in blue below. The increase for all French cities (including Paris) is shown in red.
Source: Cabinet FSL
Owners of commercial real estate in France can appeal these proposed property taxes in 2023. The filing deadline is December 31, 2024.
The following table summarizes the different property taxes that can be appealed in France and the filing deadlines for each. In France, unlike in the U.S. and Canada, there can be multiple property taxes affecting the same property.
Tax Name
Commercial Property Tax on Existing Buildings (Taxe Foncière sur les Propriétés Bâties)
Appeal Deadline
December 31
Number of Years Impacted
Current year and one year in arrears for most types of commercial real estate (CRE)
Notes
Assessments are based on a modified income and sales approach using market rents and sales prices per square meter. Factual errors relied upon the assessor and misclassification can also be argued on appeal.
Tax Name
Property Tax on Industrial Properties (Taxe Foncière sur les Propriétés Industrielles)
Appeal Deadline
December 31
Number of Years Impacted
Current year and one year in arrears for all industrial use buildings
Notes
Assessments are based on rental rates and/or a modified cost approach using the value of depreciated assets.
Tax Name
Waste Management Tax (Taxe d’Enlèvement des Ordures Ménagères)
Appeal Deadline
December 31
Number of Years Impacted
Current year and one year in arrears for most CRE
Notes
Same valuation base as property tax. Some local-specific exemptions are possible regarding cities and activities carried out in the building.
Tax Name
Special Property Tax for Office Buildings Located in Metro Paris Region (Taxe sur Bureaux : TSBCCS)
Appeal Deadline
December 31
Number of Years Impacted
Current year and two years in arrears for office buildings located in the defined area
Notes
Applies only to office buildings in the Ile-de-France region of Paris.
An annual information return is required to be filed by March 1 of each year.
Tax Name
New Construction Tax (Taxe d’Aménagement)
Appeal Deadline
December 31
Number of Years Impacted
Claims can be filed until December 31 of the second year following the issuance of the first assessment or tax bill.
Notes
Assessments using a cost approach are based on the new area (in square meters) constructed. The tax is only levied upon the value of the new construction.
Tax Name
Business Use / License Tax (Contribution Economique Territoriale)
Appeal Deadline
Must be filed annually before the second working day following May 1
Number of Years Impacted
Current year and 1 year in arrears.
Notes
Taxpayers are taxed upon their professional activities and business.
With such drastic changes to property taxes and the multitude of factors affecting them, Ryan’s property tax professionals in our Paris office are available to review and advise on any such potential appeals.
Find out how to better manage and mitigate these French property tax increases or any other commercial property taxes in Europe. Contact the Ryan professionals listed below ahead of the deadline.
TECHNICAL INFORMATION CONTACTS:
Michael Allen
Principal
Ryan
703.473.6603
michael.allen@ryan.com
Jean-Marc Subregis
Director
Ryan
+ 33 1 55 42 75 20
jean-marc.subregis@ryan.com