Exemption from the property tax: a poisoned gift?

Should we rejoice in the decline of the housing tax? Not so sure. This new shot from a plane brought in the budget of the common risk in the end to be very costly to the French.

campaign Promise of president Macron, the exemption from property tax on the primary residence for 78% of the French, was finally adopted Thursday, December 21, in the context of the vote on the finance bill 2018. Should we be pleased that such an announcement? Nothing is less sure. For millions of taxpayers, this device may well look like a Pyrrhic victory. It will, in fact, that someone had to pay the sum of 10 billion euros confiscated in the commons. Especially as the past experience shows that promises of compensation from the State does not engage those who believe. Answers to the questions that annoy.

Who is going to compensate the municipalities for their lost revenue?

The State is committed to compensate each year for the 10 billion of losses induced by this new relief tax. But as the recalls Antoine Homé, mayor of Wittenheim, rapporteur of the committee on finance and local taxation of the Association of mayors of France (AMF), in the past the State was already committed to compensate "the euro near" the removal of some of the tax (regional share of the housing tax, taxe professionnelle) and he has not kept that promise. "Moreover, it is difficult to lend credence to the word of a State in debt and facing budgetary difficulties," observes Antoine Homé. The mayors of France do not believe in it."

That may happen if the State doesn't keep its promises?

The property tax represents, according to Antoine Homé, between 20 and 25% of the revenues of the municipalities. A shortfall that would penalize and therefore the finances of local authorities. As the figure of nearly 80% of French exempt acts as a decoy. It is not uniform at the national level. Some municipalities will see almost all of their citizens exempt while for others, this rate will not exceed 30% or 40%. This may thus deepen the territorial inequalities.

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THE CONTROVERSY >> Strike against the reform of the housing tax: "action without vision"

Another pitfall pointed out by Christophe Céron, national secretary of the Union Solidaires Finances Publiques "the State compensation is done on the basis of 2017, the municipalities whose population will increase in the future will not see in parallel to increase their staffing. And they won't have the leverage of the housing tax if the population settles in the scope of the reform. Yet, they will need to invest, in particular in the local public services (childcare, daycare, school, sport, culture...) A real problem of financing may arise to term."

The commons do not seek they not then have to increase other local taxes?

What the State gives with one hand - using in the pocket of the common -, the latter will be able to look at the resume of the other. According to Christophe Céron, "for certain municipalities, expenditures could increase by means of, inter alia, from an increase of the population, the temptation may be great to play on the levers still in their possession, such as tax housing on second homes or property tax ".

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others may also consider to make pay or increase certain benefits that could be free or subsidized and still reduce some of the aid granted.

in Short, taxpayers who rub today hands could well do the grey mine tomorrow.

The relief of the property tax makes this tax more fair?

Before the reform Macron, the housing tax was considered a tax unjust. After that, nothing has really changed. The tax reduction total benefit 78% of the French in 2020 does not negate the injustice of pre-existing, which is to apply rental values different taxpayers in the same municipality.

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property Tax

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ANALYSIS >> local Tax: revision of the rental values of housing, a ticking time bomb

The current reform freezes the inequalities, regrets Antoine Homé, which argues for a revision of the rental values similar to the one adopted for the local economic and commercial. He recalls in passing that the distortion of the rental values, it impacts not only the 22% of the French still subject to tax but also those who pay the land tax, the fee for removal of household waste and the assessment of property of enterprises (CFE).