Property tax exceeds 40% in 2023: an unprecedented rise
According to the National Union of Property Owners (UNPI), the average property tax rate passed the 40% mark for the first time in 2023, reaching precisely 40.36%. French property owners have suffered an average increase of 20% between 2018 and 2023, and almost 33% since 2013, mainly due to the revaluation of rental values, as highlighted in a report published this Tuesday.
Soaring rental values at the heart of the increase
The Observatoire des taxes foncières, attached to the UNPI, calculated these figures from government data covering the period 2013-2023. It points in particular to the abolition of the taxe d’habitation on principal residences, which has prompted many communes to increase their property tax levies, as well as the multiplication of additional taxes. However, the main cause of this increase remains the rise in rental values, the basis for calculating property tax.
These rental values, which correspond to the theoretical annual rent that a property could generate if rented out, are revalued each year to keep pace with inflation. Between 2018 and 2023, they rose by 14.8%, accounting for three-quarters of the increase in property taxes over this period. Over the entire 2013-2023 decade, they are responsible for two-thirds of the observed increase.
Cities unevenly affected by increases
Paris is the fastest-growing of the 50 most populous French cities, with a 71.6% increase in its property tax rate over five years (excluding household waste collection tax), although its rate remains relatively low at 21.15% in 2023.
Nice, meanwhile, is the only major city to have reduced its property tax rate between 2018 and 2023, with a 1.4% cut. However, the Alpes-Maritimes city is forecasting a 21.7% increase in this rate in 2024. Overall, in the same year, property tax will rise by an average of 4.9% in France’s 200 largest cities, according to tax notices collected by UNPI member homeowners.
For the UNPI, this 33% increase over ten years, compared with 19% inflation and a 7.7% rise in the INSEE residential rent index, is perceived as “unfair tax treatment”. The organization is therefore proposing five measures to better distribute the cost of these local taxes, limit their increase and encourage energy renovation work.