How can you tell if your home is located in a "high-demand area"?

The law has broadened the definition of areas classified as "high-demand," which are automatically subject to the tax on vacant housing and eligible for an increase in the housing tax on second homes.

The 2023 Finance Act broadened the definition of areas classified as “high-demand.” These areas are automatically subject to the vacant housing tax, and municipalities may also decide to apply a surcharge to the housing tax on second homes. Following extensive discussions and in anticipation of its implementation in early 2023, the decree establishing the list of affected municipalities was recently published (Decree No. 2023-822 of August 25, 2023).

This new decree allows more than 2,000 additional municipalities to increase the housing tax on second homes. In fact, the 2023 Finance Act has broadened the definition of “high-demand areas” to now include municipalities with fewer than 50,000 residents that face particular challenges regarding access to housing, notably due to a high concentration of second homes. In addition, the decree updates the list of municipalities with more than 50,000 residents already covered by this measure. This new list includes rural, coastal, tourist, and mountain municipalities, as well as certain municipalities in Guadeloupe, Martinique, and French Guiana.

These include major cities such as Marseille, Nice, Lyon, Bordeaux, Montpellier, and Paris. But they also include popular tourist destinations such as Saint-Raphaël, Hyères, Fréjus, Cannes, Antibes, and Deauville—areas with a particularly high proportion of second homes. 

Due to the late publication of the decree, this new measure will take effect on January 1, 2024. It is important to note that the application of the residential tax surcharge on second homes—which can range from 5% to 60% of the tax liability—depends on the decision made by the city council. This decision must be made by October 1, 2023, to take effect in 2024.