What is the development tax ?

When one embarks on the construction of a new house, one is confronted at one time or another with the famous development tax. Little known and often confused, especially with the housing tax, this tax which the future owner must pay is divided into three parts, one communal, one departmental and the last regional. Let’s take a look at the characteristics of this inevitable payment, its calculation and its settlement.

What is the development tax?

The development tax is a tax that is applied to all construction projects for new houses, but also for reconstruction and expansion insofar as a work permit is required.

Established since 1is March 2012, it is paid to municipalities or EPCIs (public establishments for inter-municipal cooperation), departments and certain regions. It is used to finance certain creations in the territories and the extensions necessary for urbanization.

It should not be confused with the housing tax or the property tax. It actually replaces several old local taxes and construction-related declarations previously paid.

It should be noted that exemptions are possible, in particular for buildings that do not exceed 5 m². The municipalities also have the power not to apply their share in whole or in part in the context of main residences financed by a PTZ and whose surface area is greater than 100 m², work on historical monuments and annexes.

How to calculate the development tax?

The amount of development tax is based on the taxable area. The taxable surface corresponds to the sum of the interior surfaces of the walls which are covered and closed, and whose ceiling surface is greater than 1.80 metres. From these surfaces are deducted the stairs, elevators and the thickness of the exterior walls. On the other hand, attics, cellars, cellars, garden sheds and outbuildings with a ceiling height exceeding 1.80 meters are taken into account, provided that they are covered and closed.

This development tax is made up of three parts: the municipal part, the departmental part and the regional part.

  • The municipal share is decided by deliberation of the municipal council automatically for municipalities with a PLU (local urban plan) or a POS (land use plan) and optionally for other municipalities. The rate applied is between 1 and 5% on average, or even 20% in some municipalities.
  • The departmental share is decided by deliberation of the departmental council. The rate applied is unique for the department and less than or equal to 2.5%.
  • The regional share is decided by deliberation of the regional council. The rate applied is less than or equal to 1%.

The amounts of the different parts are fixed each year before November 30 to be applied from the following year.

The calculation amount is as follows:

Taxable area (m²) x fixed value x rate set by the local authority = amount of development tax

Social housing, subsidized housing and the first 100 square meters of a main residence benefit from a 50% reduction.

When and how to pay the development tax?

The development tax depends on the declared taxable area. This area is declared on a tax form when filing building permits or prior declaration of work.

Its amount is then precisely determined by the Departmental Directorate of Territories (DDT) or, for the Ile de France region, by the Interdepartmental Directorate for Equipment and Development (DRIEA). Within 6 months following the declaration or filing of the permit, a letter is sent to the individual concerned to inform him of the amount of the tax and the terms of its payment. You should know that the administration can claim a tax up to 6 years after a construction that would have been carried out without authorization.

If the amount of the tax is less than 1,500 euros, it must be paid in one go. If its amount is greater than 1,500 euros, the tax is paid in two equal installments, the first on the 12e month and the second to the 24e months after the issuance of the work permit.

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