Every fall, the little music of the property tax returns. This local tax, due no later than October 21 this year, is increasing in almost all municipalities, sometimes piano, sometimes fortissimo, with levies doubled in some municipalities. What are the reasons for this increase, and why is it not uniform?
The “property tax” is a generic name bringing together a set of taxes (on built properties, unbuilt property, and household waste collection) implemented as such at the beginning of the 20th century – but it exists under several forms since antiquity. This tax only concerns owners, whether or not they reside in their property. To this was added until last year the housing tax, payable in principle by all residents, tenants or owners – it was completely abolished for main residences on January 1, 2023.
The amount of the property tax depends both on the value of the property on the rental market and on the taxes that local authorities (commune and community of municipalities or agglomeration) wish to collect. Since 2011, the regions can no longer claim a share of the property tax, and, since 2021, the town halls receive the share that was formerly devolved to the departments, the State having undertaken to compensate “to the nearest euro” the missing revenue resulting from the abolition of the housing tax.
The calculation is based on half of the rental value of the property, revised each year by the Ministry of the Economy to take into account inflation – a deeper reform including the value of the sector or surface area is planned for 2028. The tax rate set by each local authority is then applied to this base.
In 2023, the property tax is on average 35.6% according to data made available by the General Directorate of Public Finances (DGFIP), but it includes significant variations. The municipal rate in the town of Chambord amounts to 80.98% – more than six times more than in Neuilly-sur-Seine (Hauts-de-Seine, 13.05%), and almost nine times more than in Mamoudzou (Mayotte, 9.17%).
First part of the equation, the rental value was revalued by 7.1% this year at the national level, which constitutes the largest increase in almost forty years. This increase applies to all municipalities. On the other hand, the second part of the equation, the tax rate, is the responsibility of the municipality.
The largest increases correspond to “catch-ups” of taxation that was previously lower than average, the municipalities justify. “In a context of successive reforms of local taxation, property taxes are one of the last fiscal levers for communities,” recognized the Court of Auditors at the start of 2023.
When it comes to finding additional income, in addition to State grants, the municipalities are not equal in their books of accounts – whether it concerns taxes on real estate transactions, on commercial premises, income from local public services or from European structural funds.
And, even when a city has the capacity to generate additional revenue, the property tax remains essential for its operation: the judges of the Court of Auditors have calculated that, in 2021, the property tax represented nearly 30% of municipal revenue, an average that varies greatly from one community to another, depending on the rate chosen but also on the number of new constructions and therefore new owners.
On the expenditure side, the municipalities have suffered the explosion of energy costs, up to 400%, even 500%, according to the association Urban France, which represents the twenty-two metropolises and major cities of France. In addition, the high interest rates of the loans burden the budgets of the communities which have a significant debt.
If we put aside the national revaluation of 7.1% (which applies to the theoretical rent serving as a basis for taxation), the rate applied by the communities has evolved in contrasting ways depending on the municipalities. “We have not increased the property tax for years,” explains Charles Dubois, the mayor of Charmes-en-l’Angle, a small town in Haute-Marne where the tax rate has increased the most this year ( 114%). At the same time, several resources have disappeared: we no longer have wood to sell and the psychiatric hospital which rented part of the town hall has given notice. »
In Paris, the property tax was “the lowest in France, at 13.5% compared to 41.61% on average in large French cities,” said the mayor, Anne Hidalgo. She justifies this increase (which breaks her campaign promise to freeze taxes) by insufficient state allocations. In Meudon, the property tax jumps to almost 30% and thus joins its neighbors in Hauts-de-Seine, such as Vanves or Sèvres.
In the end, around 14% of municipalities increased their property tax rate, while only 1.3% lowered the tax burden (around ?50% in Berlancourt, in Aisne, or in Bajonnette, in Gers). Between the two, the vast majority of some 35,000 French municipalities have opted for the status quo.
