This tax ( Article 1380 and seq. of the FTC ), which in fact encompasses two taxes (land tax on built properties and land tax on non-built properties), is payable by the person owning the real estate asset on 1 January of the year concerned: it is based on the cadastral rental value (theoretical annual rent) of the building in question.
Regarding land tax on built properties, the rental value is defined by reference to typical premises selected in 1970 (with subsequent annual reassessment) with the exception of buildings deemed as “industrial”, for which the cadastral rental value is calculated according to the “accounting” method, i.e. by applying a percentage (12% for constructions and installations) to the cost price of the building.
For business premises, a revision project for rental values remains underway (see 2013 declaration campaign): the new values should have applied to land tax taking effect from 2016.
Tax rates are determined by local authorities (municipalities, inter-municipal bodies, departments) and land tax is in practice accompanied (see schedule issued) by other taxes such as the special amenities charge or the refuse collection charge.
The tax is notified by means of schedule issued directly by the tax authorities. Payment is generally due in October and December (see date indicated on each tax notice).
The taxpayer therefore does not need to make a declaration except in the case of new buildings or a change in the make-up (e.g. extension) or allocation of the premises (e.g. conversion of a dwelling into an office) (Article 1406 of the FTC ).
The French Tax Administration may increase the land tax as notified until 31 December of the year following that in respect of which the land tax is payable.
If the increase is due to a failure to make (or inadequacy in) a declaration in the above cases (new constructions, etc.): ð the adjustment may be multiplied by the number of years during which the failure has resulted in an unjustified reduction in tax: such multiplier may not exceed 4 (Article 1508 of the FTC ).
Like the tax on offices in the Ile-de-France region, land tax may be rebilled to the tenant under the terms of the lease.