Company: conditions for property tax relief

As a result of the health crisis and confinement, many property owners have been faced with long-term rental vacancies, and have had to assume the charges, taxes and levies for properties that have remained empty. The French tax authorities allow certain owner-operators of commercial or industrial premises to benefit from a partial reduction in property tax for their business. Find out what conditions must be met to qualify.

Companies concerned by the property tax

Property tax is a tax payable only by owners of real estate located in France. The taxpayer may be an individual, a company or a legal entity (commercial or real-estate company).

More specifically, the assets covered by the tax are :

  • Built-up properties: these are buildings that can be used for residential or professional purposes;
  • Non-built properties: mines, ponds, rural land, salt marshes, etc.

When the taxpayer is a company, it may be required to pay both property tax and the cotisation foncière des entreprises (CFE), one of the two components of the contribution économique territoriale (CET) along with the cotisation sur la valeur ajoutée des entreprises (CVAE). The CFE is based solely on the rental value of property subject to property tax.

What exemptions are available?

There are three types of property tax exemption.

Permanent exemption

It applies to rural buildings used permanently and exclusively for agricultural purposes (e.g. barns and cellars).

Temporary 2-year exemption

The 2-year temporary exemption from property tax on buildings applies to :

  • new constructions,
  • rebuilds,
  • building additions.

To be accepted, the application for exemption must be made by the company concerned no later than 90 days after completion of the work.

Temporary exemption for more than 2 years

Local authorities may decide to fully or partially exempt certain assets for a period of more than 2 years. These are :

  • buildings for young innovative companies,
  • furnished hotels and bed & breakfasts in rural revitalization zones,
  • buildings taken over from a company in difficulty,
  • energy-efficient housing.

Obtain a partial property tax rebate

To help property owners cope with the consequences of the health crisis, the government is offering them a partial rebate on their property tax. This measure applies when the following three conditions are met:

  • Vacancy is beyond the owner's control;
  • The property has been unoccupied for at least 3 months without interruption;
  • The vacancy concerns the entire building or a part that can be rented separately.

Businesses benefiting from the tax rebate include "non-essential" businesses, hotels, nightclubs and bars. To obtain the rebate, they must submit a claim to the tax authorities within one year.