The first tax notices are sent on Wednesday for owners who are not paid monthly. And the note, which will increase throughout France, promises to be particularly salty in certain municipalities.
This is the bad surprise when you return from vacation: the property tax will experience a generalized increase this year, unprecedented for nearly forty years. To this increase of more than 7% for the whole territory, due to inflation, it may also be necessary to add, depending on your municipality, an additional increase voted by certain municipalities. In several cities, the addition will be particularly high and the bill will swell considerably.
>> INFOGRAPHICS. 59% in Paris, more than 31% in Grenoble… View the increase in property tax in the 191 largest cities in France
The French owners of their accommodation who do not monthly pay this local tax will discover their tax notice Wednesday, August 30 on their online tax space. For taxpayers who pay this tax each month, it will be necessary to wait until September 22 to know the amount of the painful. Franceinfo answers five questions about this sharp increase, which will not affect all owners in the same way, depending on where they live.
1Was this increase to be expected after the abolition of the housing tax?
Promised by candidate Emmanuel Macron in 2017, the abolition of housing tax on main residences gradually came into force from 2018 to 2020 for 80% of households. The remaining 20% – the wealthiest households – benefit from this total exemption since January 1, 2023.
By announcing the abolition of this local tax (nearly 22 billion less revenue for local authorities), the government had promised: there would be no new taxes or new taxes in return. As the Minister of Public Accounts at the time, Gérald Darmanin, stated in 2018, the end of the housing tax was to be offset by the surplus tax revenue generated thanks to growth. But that was without taking into account the economic crisis linked to the Covid-19 pandemic, which led to a historical dive into GDP (8% drop in 2020).
To compensate, a major reform of local taxation was adopted as part of the 2020 finance bill. It introduced the transfer of the share of the property tax on built properties (TFPB) collected by the departments from the municipalities and a “correction coefficient” mechanism: the “surplus” municipalities thanks to this transfer pay this surplus into a fund, in order to make up for the deficits from other cities.
But these compensation mechanisms do not take into account the evolution of the situation of the municipalities since the reform. According to A report (in PDF) of the Directorate General of Public Finances (DGFIP) published in July 2022, and quoted by The echoesa sharp increase in local taxes (property tax and household waste tax) followed the reform.
2How to explain this sharp increase this year?
In addition to the abolition of the housing tax, there are other temporary causes that vary from city to city.
The property tax base includes several elements. The first is based on “cadastral rental values”. As explained Challenges, these data are calculated from the surface area of the accommodation – increased by criteria of comfort, geographical location, etc. –, multiplied by a rate set according to the condition of the property. These values have not been revised since 1970 and will not be until 2028, as updating them would cause a “fiscal upheaval”according to the business magazine.
These cadastral rental values, which serve as the basis for calculating property tax, are indexed to inflation. For 2023, the rise in prices caused by the war in Ukraine has thus mechanically led to an increase in property tax of 7.1% for all owners (compared to 3.4% in 2022). An unprecedented increase since 1986, according to the Unpi (National Union of Property Owners). For André Laignel, socialist mayor of Issoudun and president of the Observatory of finance and local public management, it would have been possible to do otherwise. “It is a political choice on the part of the majority and the executive”judges the elected official with franceinfo.
“It would have been possible to index the overall state operating grant to municipalities to inflation. But the government and its majority refused this solution.”
André Laignel, socialist mayor of Issoudunat franceinfo
To this 7.1% is added the tax rate voted every year by the local authorities. This can increase, decrease or remain unchanged. But this year, it is on the rise in 14% of French municipalities. And some have even greatly increased the note.
The property tax is an effective lever to finance, for example, the increase in food prices for school canteens, the increase in the cost of heating in municipal swimming pools or even gasoline in garbage trucks. The rate of the household waste collection tax (TEOM), paid at the same time as the property tax, will also jump. According to calculations by the FSL research firm, relayed by The echoes, it will increase in 37% of territories. Municipalities must also absorb the increase in the remuneration of their staff, with the revaluation of the index point for civil servants, by 3.5% on July 1, 2022.
3Did the new asset declaration contribute to this increase?
The declaration of real estate was one of the novelties of the year 2023 in terms of taxation. In addition to their tax return, the owners had to complete an online declaration, specifying the surface area, the occupants and the nature of the dwelling. A way for the tax authorities to sort between main and secondary residences (the latter still being subject to housing tax), rental or vacant accommodation.
“Owners must declare any change likely to change the cadastral value, such as the construction of a swimming pool, a veranda or the transformation of a garage into a living room”recalled to Challenges Blandine Roul, notary member of the Monassier group. These extensions and improvements can also lead to an increase in the property tax. But it won’t be until next year, “duration of computer processing” obliged, as pointed out by the DGFIP in the columns of West France.
4In which cities is the property tax increasing the most?
Among the 191 cities with more than 40,000 inhabitants, Paris holds the prize for the increase in the municipal property tax rate. This amounts to almost 52%which leads to 59% the rtotal increase in this tax (with the 7% decided by the State). While she was involved during the municipal campaign in not raise local taxesthe socialist mayor of the capital, Anne Hidalgo, explained that this increase – a first since 2011 – should make it possible to invest an additional 1.2 billion euros in swimming pools, nurseries, green spaces or cycle paths in 2026.
“The increases are to be related to the initial tax rates to which they applyrecalls Maël Bernier, communication director of the comparator Meilleurtaux. Parisians do not pay much for their property tax compared to other big cities. For 77 m2 in the capital, the property tax was 770 euros in 2022, compared to 1,639 euros in Montpellier and 1,675 euros in Nîmes”she explains to franceinfo.
Another notable increase is that of Meudon (Hauts-de-Seine), where the municipal rate climbs by 35%. “The owners remain winners in relation to the housing tax”ensures however in The Parisian Denis Larghero, mayor (UDI) of the city. In the top three increases for 2023, there is also Grenoble (Isère), with nearly a 25% increase. Objective of the ecological town hall: to raise 44 million euros to finance a “social and climate justice shield”.
5 What are the reactions and remedies in the face of these increases?
In some cities, these increases voted as part of the 2023 budget have caused mayhem. In Grenoble, for example, three deputies of the ecologist mayor, Eric Piolle, were deprived of their delegations to the city council after having publicly expressed their reservations about this increase.
On the side of the owners, some do not hesitate to take legal action to contest these increases, assisted by the Unpi (National Union of Property Owners). In Le Figarothe association warns that it “will attack the increases property taxes wherever possible”. In Marseille, an appeal to the administrative court had already been filed by nearly 300 owners to denounce the increase in this tax in the 2022 budget, of the order of more than 12%. “At the time of the vote, the war in Ukraine and the rise in the point index of civil servants were added to justify the increase, whereas these factors did not exist at the time of the preparatory work on the budget”denounces their lawyer, Jacques Gobert, mandated by the Unpi.
“It’s a kitty for the current majority in view of the municipal elections of 2026.”
Jacques Gobert, lawyer for Marseille ownersat franceinfo
If justice finally canceled Marseille’s 2022 budget, it “gave the possibility to vote it again before September 30, 2023”provided you provide all “calculation elements” of the budget, explains the lawyer. Result: the increase in the property tax remained the same. Other legal actions are taken in Thiers (Puy-de-Dôme), where the increase is 18% this year, or Lyons (9%). In Grenoble, he was rejected. “The tax fed up, it is especially on the lips, observes Jacques Gobert. It’s not scrolling through the courts yet, but it’s going up.”