The property tax has climbed from 14% between 2011 and 2016 according to the observatory of the UNPI. The phased abolition of the property tax could exacerbate the trend.

This is (already) the bête noire of the owners. The land tax has already risen significantly in recent years. And the reform of the housing tax announced by the government could strengthen its inflation. According to the Observatory annual land taxes on built properties made by the national Union of property owners (UNPI), released on 12 October, the property tax has increased by an average of 14% at the national level between 2011 and 2016, excluding tax removal on the garbage.

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“The increase in property tax is therefore 4.5 times higher than the inflation experienced between October 2011 and October 2016, estimated to 3.03% by the Insee”, points out Jean Perrin, president of the UNPI.

Up to more than 32% increase

Some owners are worse off than others. The property tax is calculated each year from the rental value cadastral housing, to which are applied the tax rate voted by the local authorities, the communes basically. Where strong disparities according to the regions: between 2011 and 2016 according to UNPI, the palm of the strong increase is returned to Lille, with an increase of 32,24%! Then come Argenteuil (+ 23,30%), Nantes (+ 20,75%), Créteil (+ 20,43%) and Saint-Denis (+ 20,37%). It is better to live in Paris (+ 8,4%), Nice (+ 6.5%) or St-Etienne (+ 6,4%), in head increases the more moderate.

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The role of the property tax

All the parameters that make up the property tax increase. “Communities tend to increase year by year their tax rate, see Jean Perrin, president of the UNPI. Not to mention that irrespective of the rates, the rental values (tax base) are revised each year according to a coefficient of increase fixed by the Finance law”.

And also the adoption on 11 October in commission in the national Assembly, one of the flagship measures of the budget 2018, the deletion on 3 years of the housing tax for 80% of households, is expected to strengthen this phenomenon. Concretely, the reform of the housing tax should start with an initial drop of 30 % in 2018, and then to 65 % in 2019. Is a cost of 3 billion euros next year, and then to 6.6 billion euros and 10.1 billion in 2020.

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property Tax

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What is compensation?

in the Face of this removal of the tax revenue, and fears of a compensation incomplete State yet promised, the local authorities might be tempted to catch up on the property tax. “58 % of the French are owners of their main residence, this is equivalent to taxing more severely, more of a taxpayer on two”, considers Jean Perrin. According to him, the increase of the property tax combined with other tax measures (transformation of the ISF tax on wealth in real estate, and exclusion of income from land of the future flat-tax would threaten the owners donors. “The new investors are going to divert from the stone and donors will be tempted to sell, causing a contraction of the rental offer, particularly in areas strained, so that the rental offer is already reduced.”