A tax paid by the majority of French people is increasing this year.
A feared and now confirmed increase. The property tax, paid by all owners owning at least one property, will see a further increase in 2024. This local tax had already seen significant increases in 2022 and 2023. As a reminder, it is the tax services which revalue the tax each year. amount of the property tax according to the inflation rate calculated by INSEE in the previous November, in this case November 2023. Thus, the property tax will increase by 3.9% from 2024, which represents one of the five largest increases in this tax in the last 40 years.
However, this percentage is only a minimum and the bill could turn out to be much higher for millions of French people, depending on their municipality of residence. Indeed, in addition to the 3.9% increase, owners could also experience an increase in the tax rates voted by the municipalities which collect the property tax. In 2023, while the property tax had increased by 7.1% in all cities in France, certain communities such as Paris, Grenoble or Troyes had chosen to increase their local tax in order to make up for the revenue deficit caused by inflation and the elimination of the housing tax on main residences.
According to the Association of Mayors of France, “property tax now represents 63% of municipal revenues compared to only 30% in 2017”. Frédéric Zumbiehl, lawyer at the National Union of Real Estate Owners (UNPI), expects the majority of cities to vote in favor of an additional increase in property taxes in 2024, beyond the 3.9% already planned.
Owners will therefore have to face a double penalty: on the one hand, the annual revaluation of cadastral rental values by the tax services, which are used to calculate the tax base and are mechanically linked to inflation; on the other hand, the potential increase in the tax rate decided by their municipality. Certain large cities should therefore experience particularly painful increases, sometimes with double-digit percentages. This is particularly the case in Villeurbanne (+10%), Annecy (+14.1%), Nancy (+14.5%) and Saint-Etienne (+15.1%), all cities which have already voted their increases. The record in large cities returns this year to Nice, with a property tax increasing by 19.2% for Nice owners.
In total, 38 million French people, or 57% of the population, will be directly impacted by this increase in property taxes in 2024. This is already the third consecutive year where property taxes have increased. The final amount of this local tax depends greatly on the decisions taken by the municipalities. This new revaluation does not seem encouraging for people wishing to become owners.
