The Housing Declaration Saga Continues: Challenges for Big Property Owners
"Tax authorities' strategy for property management: seeking to prevent future controversies"
The third iteration of the "Manage my real estate" platform has hit the income tax return this year. The French tax administration aims to rectify past problems after the 2023 disaster, when the system faced harsh criticisms from auditors due to unclear information, overworked services, and a whopping €1.3 billion in refunds.
Bye-bye housing tax, but farewell to administrative ease for many French homeowners. In 2023, owners were required to provide personal information for each occupant to avoid being overtaxed. Out of France's 71 million properties, the tax office had to unravel those still liable for tax, mostly on second homes and emptied properties.
A Catalyst for Change
Property behemoths, including social landlords, local authorities, developers, banks, and trusts (SCI owners), were the main culprits for the shortcomings in property declarations for both occupants and owners in 2023. Though the declaration rate improved in 2024, reaching 78%, the rates among local authorities were disappointing, with only 50% compliance.
Olivier Thouvenin, head of the fiscal management service at the General Directorate of Public Finances (DGFiP), believes that underestimation of property ownership might be responsible for these low rates. He also attributes the difficulties faced by local authorities in identifying the tenants of properties under their management, such as fire stations, to delegated management responsibilities.
In 2025: Declare or Pay Up!
Small property owners will likely be spared fines for non-compliance in 2025, but large owners could be hitting their wallets with a fine of 150 euros per property in case of non-declaration. According to Olivier Thouvenin, some large property owners have been found to be uncooperative despite the legal obligation to declare.
The implementation of these financial penalties could improve the use of the platform and increase compliance from large property owners. In the past, non-declaration primarily impacted potential tenants who might have been incorrectly taxed and had to rectify their situation.
Key Takeaways
- Large real estate owners face growing scrutiny over compliance with property declarations in France.
- The "Manage my real estate" platform has faced challenges, including taxpayer confusion and overwhelmed services.
- Large property owners who fail to comply with property declarations may face fines starting from 2025.
- Both individuals and companies must use designated digital platforms to manage and declare their real estate properties.
- The third version of the "Manage my real estate" platform, used for declaring property ownership, faced significant criticisms from auditors in 2023, prompting the French tax administration to rectify issues.
- In 2023, it became mandatory for French homeowners to provide personal information for each occupant to avoid being overtaxed, with a focus on second homes and empty properties.
- Large property owners, such as social landlords, local authorities, developers, banks, and trusts (SCI owners), were identified as the main contributors to the shortcomings in property declarations in 2023, despite an improvement in the declaration rate in 2024.
- Beginning in 2025, large property owners who fail to comply with property declarations may face fines of 150 euros per property, aimed at improving compliance and efficiency in the use of the "Manage my real estate" platform.
- The French government is also encouraging businesses involved in real estate, such as investing, development, and management, to integrate these digital platforms into their operations for effective financial management.
