Property Tax: Ways to Avoid It

In some municipalities, homeowners who have invested in energy-efficient equipment or completed home improvements may be eligible for property tax reductions or even exemptions, subject to certain conditions. 

While property taxes are rising significantly this year, there are ways to reduce or even avoid them. While some low-income individuals or recipients of benefits for the elderly or disabled are automatically exempt from property taxes, owners of single-family homes must report their energy-saving renovations to qualify for this exemption for several years, provided they meet certain requirements.

Condition 1: Reside in a municipality that has approved the measure. The exemption is granted only if your municipality has adopted this measure through a resolution by the municipal council, which must be passed before October 1 to apply to the following year’s property tax. In 2022, only 453 out of 35,000 municipalities were eligible. To find out if your municipality is eligible, contact your city hall or the public finance office.

Condition 2: Perform work in compliance with the law. Eligible work includes the installation of wood-burning or solar thermal heating systems, heat pumps, connections to a district heating network, or the purchase of thermal insulation materials. The complete list of eligible equipment, materials, and appliances is available online (Article 18 bis of the General Tax Code, Annex IV).

A property tax reduction (25% or 50%) is also available in certain situations, such as living in a rural revitalization zone or near a Seveso-classified facility, provided the property was built before the facility was established. However, this reduction is subject to a resolution by the city council.

Condition 3: Spend more than €10,000 on renovations To reduce property tax, the owner must spend more than €10,000 (including tax, excluding labor) on renovations. This amount may be as high as €15,000 if the expenses were spread over the three years preceding the year of the exemption.

Condition 4: Live in a home built before 1989 or a new home completed after 2009. The exemption applies to older homes built before January 1, 1989, as well as to new homes completed after January 1, 2009, provided that the renovations have improved their energy efficiency beyond the legal requirements.

Amount of the exemption: The amount of the exemption varies by municipality: 50% or 100%. This reduction or exemption is valid for 5 years starting the year after the work is completed, if the municipal resolution was passed before 2019, or for 3 years if it was passed after 2019.

How to obtain it: To qualify for the tax credit, you must file your tax return with the tax office by January 1 of the first year the credit applies. This return must include all identifying details of the property, the completion date of the work, and be accompanied by documentation of the expenses incurred, including invoices for the work.

Property Tax Exemption for New-Construction Purchases: A new home is generally temporarily exempt from property tax, according to Article 1383 of the General Tax Code (CGI). The exemption lasts for two years starting on January 1 following the completion of construction. The owner of a new property must complete and submit a property tax return to their local tax office within 90 days of the date construction is completed. If the property is still under construction as of January 1 of the tax year, the owner must report it for property tax purposes even if the completion date is not yet known.