Understanding the annual tax on offices in Île-de-France in 2023

The annual Île-de-France office tax (TSB-IDF) is a major tax obligation for owners and holders of real rights to certain types of premises. In force for several years, this tax applies to offices, commercial premises, storage spaces and parking areas located in the Paris region. Its calculation, exemptions and reporting procedures may seem complex, but a clear understanding of its principles can help avoid costly mistakes. This article guides you through the essential aspects of this tax in 2023, from its scope and rates to reporting obligations and penalties.

What is the Île-de-France office tax?

The Île-de-France office tax (TSB-IDF), governed byarticle 231 ter of the French General Tax Code, is an annual tax that applies to premises located in the region’s eight départements. It applies specifically to offices, commercial premises, storage facilities and parking areas. Its main objective is to contribute to the financing of infrastructure and public services in the Île-de-France region, where real-estate pressure is particularly strong.

This tax is payable whenever premises are used for one of the purposes mentioned, whether occupied or vacant on January 1 of the tax year. For example, an office that is unoccupied but intended for professional use is still subject to TSB-IDF. It is therefore essential to identify the actual use of the premises in order to determine their liability.

Premises concerned by TSB-IDF

Offices and their outbuildings

The office category includes not only traditional workspaces, but also private practices (lawyers, architects, doctors) and their immediate and essential outbuildings. This means that meeting rooms, reception areas or archives directly linked to the professional activity are also taken into account when calculating the taxable surface area.

It’s important to note that offices under 100 m² are exempt from this tax. However, once the surface area reaches 101 m², the entire surface area becomes taxable. This rule applies without the possibility of fractioning, which can have a significant impact on the amount of the tax for small professional spaces.

Commercial and craft premises

Commercial premises cover a wide range of spaces, from stores and sales areas to craft workshops. Any premises used for a commercial or service activity is liable to TSB-IDF, provided its surface area exceeds 2,500 m². Below this threshold, commercial premises are exempt.

This partial exemption is designed to support small businesses and craftsmen, who are often more vulnerable to the tax burden. However, it is crucial to verify the actual use of the premises, as a change of use during the year does not affect the tax base for the current year.

Storage rooms and parking areas

Storage premises, such as warehouses or logistics platforms, are also subject to TSB-IDF. These spaces must be detached from a production site to be taxable. Parking areas adjoining offices or shops are also concerned, with an exemption threshold set at 500 m².

The rates applicable to these categories of premises are generally lower than those for offices, but their inclusion in the overall tax calculation can represent a significant burden for owners or holders of real rights.

TSB-IDF rates in 2023

Office tax rates in the Île-de-France region vary according to the location and type of premises. In 2023, the region will be divided into four geographical districts, each applying specific rates. This segmentation reflects economic and real estate disparities within the Paris region.

Geographical districts and their prices

The first district, which includes certain districts of inner Paris, applies the highest rates. In 2023, the rate for offices is €25.77/m². Conversely, the most remote communes in the region, grouped together in the fourth district, benefit from a reduced rate of €5.74/m².

For commercial premises, rates range from €0.83/m² to €8.84/m², while storage and parking areas are subject to even lower rates. These differences in rates are designed to adapt the tax burden to the rental value of the space, which is often higher in central areas.

Specific reductions and exemptions

Certain Île-de-France municipalities eligible for the urban solidarity allowance benefit from a 10% reduction on the applicable rate. This measure is designed to support areas facing particular socio-economic challenges, such as high unemployment or low tax potential.

In addition, there are total exemptions for certain types of premises. These include offices of less than 100 m², retail premises of less than 2,500 m², and parking lots of less than 500 m². Premises located in urban free zones (ZFU ) or used for health, social, educational or cultural activities are also exempt.

A temporary exemption can also be granted for vacant premises that are to be converted into housing, provided that the conversion is undertaken within four years. This measure encourages the reconversion of business premises into housing, thus responding to the housing crisis in the Paris region.

Who is liable for TSB-IDF?

The tax on office space in Île-de-France is payable by the owner of the premises, whether an individual or a legal entity. It also applies to holders of real rights, such as usufructuaries or emphyteutic lessees. The latter have a right of use over the property and receive rental income from it, without actually owning it.

If the premises are sold before the tax is due, the former owner can request a refund from the new owner. This provision is designed to avoid double taxation and clarify tax responsibilities between the parties.

In the case of a commercial lease, the tax can be passed on to the tenant, but only if the lease contract expressly provides for this. This clause must be carefully drafted to avoid any subsequent disputes. It is advisable to consult an expert to ensure that the lease correctly incorporates this obligation.

Declaration and payment of TSB-IDF

Forms to use

Office tax declarations in the Paris region are made using specific forms, available on the tax authorities’ website. In 2023, taxpayers must use form n° 6705-B to declare their premises. Companies reporting to the Direction des grandes entreprises (DGE ) must complete form n° 6705-RK.

The declaration must be sent to the appropriate tax office, based on the location of the premises. If several premises are under the jurisdiction of the same department, a single declaration can be filed, simplifying the administrative process.

Deadlines and sanctions in case of non-compliance

In 2023, the declaration and payment of TSB-IDF had to be made by February 28. Any delay or omission may result in financial penalties. In the event of failure to declare, interest is charged on late payment, as well as a 5% surcharge, in accordance witharticle 1731 of the French General Tax Code.

These penalties can quickly add to the tax burden, especially as TSB-IDF rates are revised every year in line with theconsumer price index. It is therefore essential to respect deadlines and regularly check rate updates to avoid any nasty surprises.

Calculation of TSB-IDF and possible exemptions

How to calculate the taxable area?

The taxable surface area corresponds to the sum of the actual surface areas measured at floor level, between walls, and rounded down to the nearest square metre. Common areas and freeways are not included in this calculation. For example, corridors, lobbies and stairways are not included in the taxable area.

Accurate measurement of surface areas is crucial to avoid any disputes with the tax authorities. An error in calculation can lead to a tax adjustment, accompanied by penalties. For complex premises, it may be useful to call on the services of an expert surveyor to obtain a reliable measurement.

Exemptions to know

In addition to the exemption thresholds mentioned above (100 m² for offices, 2,500 m² for retail premises, 500 m² for parking lots), there are other exemptions. Premises located in urban free zones (ZFU ) or used for health, social, educational or cultural activities benefit from total exemption.

Vacant premises awaiting conversion into housing can also be temporarily exempted, provided certain conditions are met. This exemption is designed to encourage the conversion of office space into housing, a major issue in the Paris region. To benefit from this exemption, it is necessary to commit to carrying out the work within four years.

Points to watch and tips for optimizing your tax situation

There are a number of pitfalls to be avoided in the Île-de-France office tax system. One of the main points to watch out for concerns theactual use of premises on January 1st. A change of activity during the year does not affect the tax base for the current year. For example, if a premises is converted to residential use in June, it remains subject to TSB-IDF for the entire year.

Another crucial point is the annual revision of rates. The amounts change in line with theconsumer price index, and it is essential to keep abreast of updates to anticipate the cost of the tax. Detailed rates are available inarticle 231 ter of the French General Tax Code.

To secure your tax situation, it may be wise to seek personalized assistance. A real estate tax expert can help you identify possible exemptions, optimize tax calculations and avoid costly errors. A request for a tax ruling from the tax authorities may also be considered, to obtain an official response on the application of the tax to a particular case.

Finally, it’s important to note that taxes similar to the TSB-IDF exist in other French regions. Since 2023, the departments of Bouches-du-Rhône, Var and Alpes-Maritimes have applied a comparable tax, with specific rules and scales. Property owners and investors should therefore be vigilant, especially if they own premises in more than one region.

To go further in optimizing your real estate costs, you can consult specialized resources, such as this article on strategies for optimizing the cost of your future office.