Posted on Dec 4, 2023 at 12:03 pm by James T
The year 2023 saw a significant increase in property tax in France, with an average increase of 7.1%. This increase was largely influenced by the gradual elimination of the residence tax, which had a direct impact on taxpayers. In November, approximately seven million property owners had to pay this tax again, with payments spread over 11 or 12 months, and these monthly amounts were adjusted accordingly due to the increase.
While the increase is slowing down, the consumer price index remains high and significantly affects this tax. Let’s see how these factors could influence the evolution of property tax in 2024.
Table of Contents
The issue of taxes on second homes
The debate over the increase in taxes on second homes continues to rage in France, especially in the current context of property tax. A decree allowing more than two thousand municipalities to increase these taxes on second homes has recently come into effect.
Exemptions and government measures in response to inflation
Exemption from property tax is automatically granted by the tax administration for the elderly, disabled, and low-income individuals. In order to combat inflation, the government has also announced that it will index the income tax brackets starting in 2024.
- Measures taken to assist certain segments of the population:
- Automatic exemption for seniors, disabled individuals, and low-income individuals;
- Indexing of income tax brackets to combat inflation.
We count on you! Support us by sharing our articles, it is the simplest and most effective way to contribute.
Impact on economic growth
The Organization for Economic Cooperation and Development (OECD) has revised its growth forecasts for 2024 downwards. This economic situation could therefore have repercussions on household incomes and their ability to cope with tax increases, such as property tax.
The cost of living in France impacted by the increase in property tax
The increase in property tax in 2023, which represented a twice as large increase as in 2022, is making life in France increasingly difficult. This phenomenon particularly affects elderly people wishing to live peacefully in their homes between the ages of 65 and 85, whose cost of living reflects all the difficulties of living in France.
Evolution of the price index and repercussions on property tax
In 2023, property tax in France increased significantly, mainly due to the gradual elimination of the residence tax. In November of that year, approximately seven million property owners had to pay this tax with payments spread over 11 or 12 months, in response to this increase.
For the year 2024, there are signs that this upward trend could continue. Some municipalities in Pas-de-Calais and Nord have chosen not to increase property tax, but in other regions, it remains stable in 1,383 municipalities, increased in 129 municipalities, and decreased in 26. The prospect of an increase in 2024 is reinforced by the national revaluation of cadastral rental values, with an estimated increase of at least 4% as of January 1st.
Data from INSEE shows that the consumer price index in November 2023 was 3.4% on an annual basis, and the harmonized price index remains high, with an increase of 3.8% in November 2023 compared to November 2022. Although the projected increase in 2024 is less significant than that of 2023, it seems likely that property tax will continue to increase in certain regions of France.
The consequences for property owners
Unfortunately, this increase in property tax represents a real problem for property owners who are already struggling to make their investments profitable. The question remains open as to the evolution of this tax for 2024 and how the authorities will be able to protect taxpayers.
