Study Exposes Property Tax Explosion In France

by Ulrika Lomas, Tax-News.com, Brussels

08 October 2010

The findings of a recent study into property taxes levied on developed property in France, conducted by the national union of property owners (UNPI), confirm an undoubted explosion in property tax rates over the past few years.

In its study of more than 30,000 municipalities in France, the UNPI examined the development of property tax charges on developed property between 2004 and 2009, and revealed that over the course of this period, some owners saw their property tax bill rise by almost 50%, while the consumer price index only rose by 8%.

According to the UNPI, these “unreasonable” increases are the result of:

• Annual increases in property tax rates determined by the individual French local authorities (in some cases between 2004 and 2009 the rates were increased by more than 70%);
• The annual adjustment of the tax base by the state (in 2009, the increase was fixed at 2.5% by the country’s finance law, compared to 1.6% in 2008).

Commenting on the findings of the study, President of the UNPI Jean Perrin expressed his concern that this dramatic increase in property tax is set to continue, particularly given the transfer of powers from the government to the local authorities and the recent reform of local taxation in France (the abolition of local business tax in France and the forthcoming reform of rental values).

Consequently, the UNPI is calling for:

• The introduction of a ceiling on compulsory levies imposed on property;
• The development of property tax to be limited to the consumer price index;
• The government to allow local authorities the freedom to fix low rates to encourage competition.
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