Abundance of allowances, rental values exceeded: faced with the complexity associated with property taxes, the Court of Auditors is pleading on Monday for greater transparency in order to facilitate the management of these by local elected officials.
With a return of 35.3 billion euros in 2021, property taxes on built and unbuilt properties are a pillar of local taxation, recall the financial magistrates in final observations. Applied to nearly one in two French people, property taxes are characterized by the complexity of the calculation of their base, based on old cadastral rental values and marked by numerous abatement and exemption systems, they add.
The establishment of the amount of property taxes has long been based on parameters determined from rental market conditions dating from 1961 for unbuilt properties and 1970 for built properties, regrets the institution of rue Cambon.
An update of the rental values of business premises has indeed taken place, but the update of these values, disconnected from the current rental market, is still awaited for residential and industrial premises. A delay which weakens the foundations of property taxes and harms the fair treatment of taxpayers, judges the Court.
Lessons learned
Before initiating the update of the rental values of the 52.6 million residential premises in France, the financial magistrates suggest drawing up a short-term report on the review carried out on the professional premises, in order to draw lessons.
More generally, they call on the State to prepare this update in partnership with local authorities, to enable them to measure (its) impact on their property tax revenues.
Still with a view to transparency, the Court of Auditors recommends providing local decision-makers with precise statistical information on the nature of taxpayers subject to property taxes in their municipality (individuals, businesses, etc.) and publishing the report on the cost of the local direct tax exemption and reduction measures provided for in the finance law for 2017.
If it is on the rise, the cost of the numerous allowances, exemptions and reductions is difficult to reconstruct and the monitoring of the number of beneficiaries concerned is proving to be insufficient, deplores the Court, which quantifies the bill for the allowances alone at 2 billion euros for the State in 2021, compared to 113 million euros in 2016.
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