The government is considering new measures to limit the effects of galloping inflation on the purchasing power of the French. And homeowners, threatened by soaring property taxes, could be the next to benefit from a tax boost.
Normally, rents are indexed to inflation. But faced with soaring prices, the government wants to deploy a rent shield to cap rent increases 3.5% for 1 year.
However, it is not only rents that follow the rise in prices: the property tax, which approximately 30million taxpayers must pay each year, is also revalued every 12 months according to inflation.
And for good reason: the rental values of housing, which serve as the basis for calculating the property tax, are determined from theharmonized consumer price index (HICP), a variant of the consumer price index, which serves as a benchmark for calculating inflation in France.
However, last May the HICP showed an increase of +5.8% over 1 year, according to estimates by the National Institute of Statistics and Economic Studies (Insee). Worse: still according to INSEE, the HICP could exceed +7% next September. For comparison, it was only +0.2% in 2020.
Result? If the revaluation of rental values is confirmed by the finance law for 2023, the property tax risks jumping by +7% next year.
However, Bercy would consider making a gesture in favor of the owners. We are considering limiting the mechanical increase in the property tax linked to inflation, reportedly indicated to the Figaro the entourage of the Minister of the Economy, Bruno Le Maire.
No cap yet
If no ceiling has been set for the moment, the measure should be integrated into the next finance bill, says Bercy. A relief for the National Union of Property Owners (UNPI).
But the local authorities still have to play the game. Because they also have their say on the evolution of the property tax, which represents a significant part of their tax revenues. And the increases observed in 2022 have been salty in certain municipalities.
This is particularly the case in Marseille, where the property tax has soared +13.1% over 1 year. In response, the UNPI decided to file a complaint against Marseille for the first time in its history. The towns of Tours (+11.6%), Strasbourg (+9%) or Nantes (+8%) have also seen strong increases.
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