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Property tax up 27.9% in 10 years

Published November 05, 2021 - 3 mins reading time
Individuals Real Estate

Property tax, the local tax paid by homeowners, jumped by more than 27% between 2010 and 2020, an increase three times higher than the rise in rents and inflation. The Union nationale de la propriété immobilière (UNPI) fears that while 2021 may see a lull, the local tax reform introduced this year could lead to increases in property tax on built-up properties as early as 2022.

Greater property tax increases in western cities

The increase in property tax is substantial for households. The tax has risen by more than 27% on average over 10 years, according to UNPI figures published on October 19, 2021. More specifically, over 5 years, property tax has risen by 11.4%, compared with 3.7% for inflation and 2% for rents. Between 2010 and 2020, it finally rose by 27.9%, compared with 8.9% for inflation and 9.7% for rents.

The UNPI has compiled a list of rate increases in France's most populous cities. It shows that property taxes have risen by more than 30% in 12 of the 50 major cities. Nantes tops the list (+37.5%), followed by Villeurbanne (+36.81%) and Clermont-Ferrand (+36.02%). Val-d'Oise (+37%) and Yvelines (+76%) are also among the hardest-hit departments.

Increase in rental values and rates voted by local authorities

According to the UNPI, the rise in property tax is due partly to the increase in rental values (automatic revaluation of 6.1% in 5 years and 14.2% in 10 years) and partly to the increase in rates voted by local authorities. As a reminder, the way this tax is calculated takes into account the cadastral rental value of the property (which corresponds to the amount of rent the owner could theoretically obtain), to which is applied a tax rate voted by the local authorities.

The association's president, Christophe Demerson, denounces " an easy solution " adopted by local councillors who " need revenue and are turning to landlords ".

Call for moderation

The UNPI believes that the property tax burden is likely to increase in the coming years with the abolition of the taxe d'habitation, which could prompt local authorities to compensate for the shortfall, despite the State's commitment.

To support households faced with an avalanche of taxes and frequent payment difficulties, the association has put forward a series of proposals:

  • Regulate property tax in the same way as rents are currently regulated
  • The inclusion of a golden rule in the revision of rental values to prevent energy renovations from having an impact on residual property and housing taxes.