2025 Finance Act Housing Tax Now Exclusively Focused on Secondary Residences
The 2025 Finance Act brings significant changes to the French housing tax system, focusing exclusively on secondary residences.
A New Era for French Property Taxation
As we step into 2025, French property owners are facing a landmark shift in taxation. The housing tax (taxe d’habitation) has undergone a dramatic transformation, now applying solely to secondary residences. This change marks the culmination of a gradual reform process that began years ago, aiming to alleviate the tax burden on primary homeowners.
Key Changes You Need to Know
- Primary Residences: Breathe a sigh of relief! If you’re living in your main home, you’re now completely exempt from housing tax.
- Secondary Residences: Own a vacation home or pied-à-terre? You’ll continue to pay the full housing tax on these properties.
- Local Authority Powers: In areas with housing shortages, local authorities retain the ability to apply surcharges ranging from 5% to 60% on secondary residences.
What This Means for You
Primary Homeowners
If you’ve been eagerly awaiting tax relief, your time has come. The complete exemption from housing tax on primary residences is now a reality, putting more money back in your pocket.
Secondary Property Owners
For those of you with a getaway home or investment property, it’s important to note that you’ll still be liable for the full housing tax. This could significantly impact your property expenses, especially in high-demand areas where additional surcharges may apply.
Implications for Real Estate Investors
The new tax landscape creates some interesting dynamics for property investors:
- The increased tax burden on secondary properties may affect your investment returns.
- The classification of your property (primary vs. secondary) now carries even greater tax significance.
- Local tax rates will continue to vary significantly based on location, potentially influencing your investment decisions.
Professional and Temporary Housing: What’s Changed?
The 2025 Finance Act also brings changes to other types of properties:
- Professional Use: Premises used exclusively for professional purposes are now excluded from the housing tax.
- Temporary Housing: The law expands exemptions for certain types of temporary housing, including those for students, elderly care facilities, and emergency accommodation.
What You Should Do Next
- Verify Your Property Classification: Double-check with local tax authorities to ensure your properties are correctly categorized.
- Review Potential Surcharges: If you own a secondary residence, investigate whether your property’s location is subject to additional tax surcharges.
- Reassess Your Investment Strategy: Consider how these changes might affect your current and future real estate investments.
- Stay Informed: Keep an eye on local tax rates and any changes in your area that could impact your tax obligations.
- Update Your Property Information: Remember to declare any changes in your property’s occupancy status through the new online “Biens immobiliers” service before July 1, 2025.
Need Help Navigating These Changes?
At Service on New Grounds, we understand that tax laws can be complex and overwhelming. Our team of regulatory, accounting, and finance specialists is here to help you make sense of these changes and optimize your property tax strategy.
For personalized guidance tailored to your unique situation, don’t hesitate to reach out. Together, we can ensure you’re making the most informed decisions in this new tax landscape.
Visit our website at serviceonnewgrounds.com for more information on our services and how we can assist you with your property tax needs.
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References
- Editions Francis Lefebvre (2025): https://www.efl.fr/actualite/loi-finances-2025-taxe-habitation-recentree-seules-residences-secondaires_ff080d2cd-b75f-43d6-9c5f-f4b93d6ff0d3
- Impot gouv (2025): https://www.impots.gouv.fr/particulier/questions/je-suis-non-imposable-limpot-sur-le-revenu-vais-je-payer-une-taxe-dhabitation
