Property tax: why do two neighbouring houses not pay the same amount?

Two similar façades, the same square metres, the same quiet street.

The council tax bill arrives… and the amount is quite different.

People who live in residential neighbourhoods are often surprised: properties that are virtually identical - sometimes even semi-detached - can show very different property tax amounts. This difference is not down to a council whim, but to a mechanism of rules, outdated records and technical details that hardly anyone knows about.

How the property tax value is determined

The starting point, in most countries, is always the same: the property’s official description. In France, for example, this comes from the H1 and H2 forms, completed when a house is built or undergoes major works. Elsewhere, the principle is the same - only the name of the document changes.

In these records, the authorities keep data that seem simple, but make a big difference to the final calculation:

• internal floor area
• outbuildings/ancillary spaces (garage, store, loft, basement/cellar)
• glazed areas, such as enclosed balconies and conservatories
• number of bathrooms and comfort level
• how each space is used (residential, business, parking space, workshop, etc.)

Any change that is missed or incorrectly declared can alter the tax base. A closed garage converted into a bedroom, an extra bathroom, a balcony incorporated into the living room, or even an outbuilding demolished but never updated on the register is enough to create a difference between neighbours.

The more out of date the property record is, the greater the risk that the tax bill no longer matches today’s reality.

Forgotten declarations and outdated registers

In many European municipalities, including in France, the tax system relies on old information - often decades old. The house has changed, the residents have changed, the neighbourhood has changed, but the register remains almost frozen.

That creates curious situations. A home that has received several improvements over the years - all properly declared - may end up with a much higher bill than the neighbour who renovated “under the radar” and never notified the tax authority.

The opposite also happens: properties that have lost value - through lack of maintenance or because the area has declined - continue to be treated as if they were still high-end, simply because nobody requested a reassessment.

People who compare only the external appearance of houses often see unfairness where, in practice, there is a difference in what information is recorded.

Category, standard and state of repair

Another part of the puzzle is the category assigned to the property by the tax administration. Each home is associated with a “standing” level that reflects finish, comfort, overall condition and even the immediate surroundings.

Two neighbours with similar layouts may end up in different categories if, for example:

• one refurbished the kitchen and bathrooms using expensive materials
• the other kept the home in a simpler condition, with older fittings
• one plot is noisier (fronting a main road) while the other faces a quieter stretch
• there are differences in sunlight, outlook, or nearby nuisances (pub, railway line, warehouse)

These nuances are translated into coefficients that increase or reduce the value used in the calculation formula. In practice, a small change in category can be enough to produce a noticeable difference on the bill.

The role of “rental value” in the charge

In countries such as France, the cornerstone of the property tax calculation is the valeur locative cadastrale - roughly, an administrative estimate of the property’s annual rental value. This figure does not reflect today’s market rent, but an older snapshot.

The value was set per square metre, by property category and by municipality back in the 1970s, and has often been adjusted only by indices over time, without a full review in many places.

Factor	Impact on the rental value
Property category	Homes deemed higher standard are given a higher value per m²
Municipality / neighbourhood	More sought-after towns and areas have higher historical rates
Internal coefficients	Adjust up or down depending on condition, aspect and surroundings

Result: two houses that are practically the same, on the same street, can have different cadastral values due to decisions made 40 or 50 years ago that have never been revisited.

When the local authority percentages are applied

Once the rental value is set, the next step is the percentages set by local authorities. In France, this can involve the commune, intercommunal structures and certain municipal groupings. Each country’s institutional set-up differs, but the logic repeats: several bodies apply their share to the same base.

These percentages are decided politically through the budget process and apply to all taxpayers in the area. A resident cannot usually challenge the rate on its own - only the base it is applied to.

When two identical houses in the same town pay different amounts, the issue is almost always the base, not the rate.

Why the difference feels so arbitrary to residents

For the person receiving the bill, everything boils down to the final amount. But that figure comes from overlapping layers: the property’s physical data, its category, coefficients, the historic per‑square‑metre tariff, and the rates voted each year.

A single divergence at any one of these stages is enough for the amounts to drift apart. An under-declared conservatory, an unregistered outbuilding, an old refurbishment never reported, or a classification error made years ago can remain hidden for decades without anyone noticing.

How an owner can check whether they are overpaying

In systems similar to the French one, the process starts with the cadastral assessment record (or equivalent document), which shows the data used by the tax authority. The resident can request a copy from the administration and check it point by point.

Useful steps include:

• checking whether the recorded floor area matches the current reality
• confirming whether outbuildings still exist or were demolished
• assessing whether the assigned category makes sense for the home’s current standard
• comparing with a neighbour willing to share their own document
• challenging obvious discrepancies in writing, supported by photos and plans

If there is a clear error or an obviously outdated situation, many administrations will revise the base, sometimes with effect for future years. In some cases, it is possible to request a retrospective correction, provided the mistake can be proven.

A quick explanation of a couple of key terms

Two concepts commonly cause confusion:

• Tax base: the value to which the rate is applied. For property tax, this corresponds to the “rental value” adjusted by coefficients.
• Rate: the percentage set by the council or equivalent authority. Even a small rate produces high amounts if the tax base is overstated.

When a resident feels they are paying a lot compared with a neighbour, it usually makes more sense to question the tax base first than the rate, which applies to everyone.

Practical examples of differences between neighbours

Imagine two semi‑detached houses built in the 1980s.

House A:

• refurbished kitchen and bathrooms to a high standard
• enclosed the balcony/veranda and turned it into living space
• set up a small office at the back, declared as an annex/outbuilding

House B:

• kept the original, basic finish
• balcony/veranda remains open
• has no declared outbuildings

The administration will likely see House A as a higher category and with a larger usable area. Even if the front of both houses looks the same, the internal calculation will differ. House A will pay more, and the difference will not come from favouritism, but from the information recorded on forms over the years.

Now consider the opposite scenario: House B is in poor condition - damp, old wiring and plumbing - but is still classified as mid‑range or high standard, with data frozen since the 1980s. The owner can argue that the cadastral value no longer reflects reality and request a review, providing photos, reports and, if possible, a professional assessment.

In the end, understanding how this kind of property tax works helps residents read the bill differently. Instead of seeing only an abstract injustice, it becomes possible to identify where - somewhere along the long timeline of the register - the calculation started to drift away from the real-life condition of the home, and then take action, with evidence, to bring the tax closer to what the property genuinely represents today.