Homeowners’ local tax to increase by at least 3% this year in France

Property owners face a certain rise in taxe foncière this year as key components have risen.

First, the property’s notional rental value (valeur locative) rises with the 2.8% inflation rate due to higher energy costs. Figures for December and November show inflation at 2.8%, after 2.6% in October.

Secondly, the government has increased its base taxation level by 3.4%. This is the highest since 1989 and a significant increase on 2021’s 0.2%.

The remaining factor is local councils’ tax rates but these are not yet known.

However, national statistics agency Insee said the other rises meant taxe foncière would increase by at least 3%.

Taxe foncière, paid by owners of main homes and holiday homes, has risen by 28% over the past 10 years, mainly due to increases in local councils’ tax rates. It raises €27billion a year.

Read more: French property owners’ taxe foncière bills up 27.9% in ten years

Read more: Residents shocked by 200% property tax rate rise in east France town

With taxe d’habitation all but phased out, councils facing budget shortages due to the loss of this income will look to taxe foncière to help fill some of the gap.

However, it is also used in the calculation of other local taxes, including the taxe d’habitation on holiday homes.

Only 20% of households still pay taxe d’habitation but their bills for main homes were cut by 30% in 2021 and fall by 65% this year to mean abolition for main homes in 2023. The tax will be retained for holiday homes.

Full details on the taxe foncière rate must wait for decisions in autumn – but councils varied enormously last year, from -16.2% in Toulouse to +17.7% in Montrouge, Hauts-de-Seine.

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