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House Rates liability after selling

Posted by Percy12-197803 - Created: 13 years ago
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My friend had to sell his house in France and return to the US. The deal went through with a "gentleman" from Scotland. The new owner moved in on 28 Nov 2003 and handed over the cheque via the Notaire etc. The lawyers completed the deal on 14 January 2004.

My friend has now had a demand for the Tax fonciere (sp) for 2004, posted to him by the new owner - who tells him that because he was still the registered owner on 1 Jan 2004 he is liable for the tax. Is that true? When we bought our house here we did a pro-rata with the seller.

Any advice would be welcome -  Bill

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8 replies (Showing replies: 1 to 8)

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Posted by karen.snooke - 13 years ago

Thanks,You have made me feel like i will fight this ,we have only just found out about the tax d'habitation from my french friend and then reading the letters on anglo,the estate agent never said a word to us ,we also have had a lot of problems with this villa ,they never told us the oil tank was drained completely ie:i would arrange to have this filled if i was you before you arrive!!!, so come January 3rd 2 adults 3 children on a saturday and no way of ordering till monday we froze.The villa was filthy lots of thing damaged the oven missing and the hob cracked , the agency said go out and buy new ones and they would give us the money back...we bought them ,fitted them (ourselves luckily)and then gave then the bill , two months later they tell us sorry we are not giving you the money back you can take them with you (i would have chosen better quality if i had known,not the cheapest) the girls bedroom is damp in the winter ,the condensation runs down the walls..... into the electrical sockets..!!! they were meant to come and sort it out but haven't as yet .They didn't read our water meter either so the bill came through with 2/3 months of the other peoples on there,we have sent them a letter and they are splitting it by days not useage,not good enough but better than the full thing .anyway there are alot more things wrong so we can't wait to move hopefully beginning of next year!!!!!!  karen snooke

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Posted by No.6 - 13 years ago

Hi Karen,

Concerning Taxe d'Habitation (not quite the same rules as Taxe Foncière, as G2rakkam points out above), funnily enough we had the very same situation when we first arrived in France, moving into empty accommodation on the 11th January, having signed the rental contract in November.

The agency told us that the owners (who lived in the south west of France) expected us to pay the Taxe d'Habitation that first year, given that the property was empty and had been held over for us since November.  Verbally, I had agreed this with the estate agent, even (but nothing to this effect was written into the rental agreement - probably because that would not have been legal!) 

However, after some months we got into an indirect battle with the owners who refused to pay for repairs to the overflowing sewer and non-working cooker and tried to get us to pay for an astronomical water bill for a period starting 6 months prior to our moving in (again, on the basis that the property had been held for us without rent for 2 months). When we bought another place and decided to move out later that year, they also tried to our hold on to our 2 months' deposit! 

Anyway, this is when the law governing the Taxe d'Habitation came in jolly useful.  When I received the bill (which had been 'magically' issued in my name), I simply wrote to the tax office innocently claiming that I had understood that I would not be liable for this tax with a copy of the rental agreement which clearly showed that the rental started on the 11th January and not the 1st, a copy of our removal firm contract which showed that we had just moved to France with all our furniture on the 10th (i.e. we were not liable for Taxe d'Habitation in a previous property) and they duly sent me a little exemption certificate in return - we never had to pay the tax and never heard from them again, because the law is quite clear on the subject of the 1st January occupation.

However, I think that I read somewhere that if the property had been empty but already contained furniture for our imminent personal use on the 1st January, then we would have been liable for the tax. I guess that's to stop some people temporarily moving out and back in again in order to avoid paying!!

As I see it, the moral of this story is that unless you had agreed with the owner to pay and feel morally bound to do so (we certainly didn't after all the hassle and additional expenses that this owner had caused us - and the agent just turned a blind eye!), then legally you really don't have to if you weren't there on January 1st.

But in your case, as you say, and especially having signed a rental contract with the 1st January written into it (that really is the key!), I very much suspect the property owner and the agent (if applicable) will expect you to pay it (did they mention it to you all?). Although the law is quite strict about the 1st January rule, it was designed for people moving within France, I'm sure. In your case, although no doubt you could prove you weren't actually there on the 1st, I feel you would have a hard job proving to the Tax office that you weren't expecting to pay the tax and obviously you can't claim that you paid the tax in a previous French property, either..

Hope this helps.

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Posted by karen.snooke - 13 years ago

Hi, this tax d'habitation..... is for who ever was living in the house on the first of January you say,any ideas whether we are still liable if we signed the rental contract for the first, but didn't actually move over here from the uk until the third January,i know we probably are but it would be nice to check   many thanks karen snooke

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Posted by karen.snooke - 13 years ago

Hi, this tax d'habitation..... is for who ever was living in the house on the first of January you say,any ideas whether we are still liable if we signed the rental contract for the first, but didn't actually move over here from the uk until the third January,i know we probably are but it would be nice to check   many thanks karen snooke

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Posted by No.6 - 13 years ago

quote:...This is mentioned during the notary agreement and is obligatory by law.

Yes, although this is usual practice, if it wasn't specifically mentioned in act of sale (i.e. you never discussed it or agreed it with the buyer + notaire at the time), then legally (from the Tax authorities' point of view) you are the one responsible for payment as you were the legal owner on Jan 1st. 

In fact, even with the clause written in, you are supposed to pay the bill and claim back the pro-rata portion directly from your buyer for that (split) year.

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Posted by Percy12-197803 - 13 years ago

G2rakkam

Thanks very much for the info - I will pass it on.

Regards

Bill

 

 

 

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Posted by G2rakkam-185765 - 13 years ago

To clarify further,

since your friend was technically the owner untill 14th January 2004, he will pay for the first 14days of tax fonciere on pro-rata basis and the new owner pays for the rest. (If I were the new owner, I wouldn't have bothered)

for tax d'habitation, whoever was living in the house on 1st january 2004 is liable to pay for the full year tax. 

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Posted by G2rakkam-185765 - 13 years ago

Hi Bill. The new owner is confusing the tax d'habitation with tax fonciere.

Tax fonciere: ownership tax, to be split on pro-rata basis. This is mentioned during the notary agreement and is obligatory by law.

Tax d'habitation: living tax, to be paid by the person who was living there on 1st Jan of the taxable year.

Hope it clarifies the matter.