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More than a third of municipalities (36%) plan to increase their share of property tax property tax this year.
The information comes from a survey conducted among 1,869 municipalities and inter-municipal authorities by the Association of Mayors of France (AMF).
In 2020, that figure was 7%.
The other municipalities expect to make no changes. The increase mainly concerns property tax the property tax, one of the last sources of revenue that municipalities can influence, as well as the tax on garbage collection.
Property tax is established by applying a rate voted by the municipality to half of the theoretical annual rental value of the property, eg. 20% x (€ 4000/2) = € 400.
The survey also revealed that 29% of municipalities are seeking to reduce exemptions and compensation related to property tax, while only 2% did so last year.
AMF chief Philippe Laurent said that among the municipalities surveyed, bills are expected to increase on average by 2 to 3% (or around 6 to 9% for municipalities actually considering increasing the rate). The bill generally also includes part of the tax that goes to the departmental councils, but this year the money allocated to the departments also goes to the municipalities and is subject to increases, where this is provided for.
The reasons for these increases include:
- The pandemic, for which Mr. Laurent said he had not been fully compensated by the State: masks and gel, protective clothing and screens, cleaning, aid to businesses, drop in income from canteens and nurseries;
- Total elimination in 2021 of housing tax for most main households, which, according to the AMF, has not been fully compensated in many municipalities;
- A government policy of lowering local taxes on businesses, which also goes to the municipal funds.
According to the AMF, this increase is also linked to the municipalities’ determination to maintain the investment. Almost 70% of small municipalities maintain plans compared to initial estimates – 8% intend to invest more. The figures are 60% and 9% for large cities.
An AMF spokesperson said: “Municipalities lost 6 billion euros during the Covid crisis. This is why, to revive investment, increases are necessary.
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