As we have been talking about for several months, the concerns of a soaring property tax for 2023 will perhaps find an answer in the finance bill (PLF) for 2023, the examination of which has just begun.
Everything is based on the famous formula for the flat-rate revaluation of rental values, derived from inflation, which determines the basis for calculating the property tax and the housing tax on second homes (the housing tax on residences main ones will disappear completely in 2023). For next year’s local taxes, this formula will take into account the Harmonized Consumer Price Index (ICPH) of November 2022, which can today be estimated at close to 7% due to the very high levels of l ‘inflation.
Mechanical increase of about 7% in sight
In concrete terms, independently of the tax rates voted by the municipalities, which can fall (this is very rare), stabilize or increase (this is frequent), property tax and housing tax on second homes would experience 2023 a mechanical increase of around 7% after already +3.4% this year.
However, the government has so far made no provision in the PLF 2023 to cap this increase, which on the contrary satisfies the projected budget of local authorities. However, there is no logic in passing on the current skids in fuel, energy or food costs to the rental value of housing…
Local tax shield
An amendment from the Freedoms and Territories political group (rather in the centre) was nevertheless adopted by the Finance Committee. It plans to cap this annual revaluation of rental values at +3.5% in 2023, with a specific cap of +2.5% overseas.
This limitation to +3.5% was not chosen by chance: it would be at the same level as the shield of the law on purchasing power which protects tenants for one year from an excessive revaluation of rents ( IRL capped at +3.5%). This amendment therefore proposes a local tax shield for owners which, even if it is not adopted, will have the merit of opening the debate on this local tax drift.