Would all the arguments be good to justify an increase in the property tax in 2023? That of the city of Lyon can in any case raise questions. The Lyon municipality indeed evokes the general inflation and the unprecedented increases in energy-related costs, essentially the explosion in the price of electricity, which would represent a provisional additional bill of at least 30 million euros this year. . Lyon has thus decided to make its owners contribute by announcing a 9% increase in the 2023 property tax rate. This rate, which is currently in the low average of large cities, will increase from just over 29% at almost 32%.
This increase is of course much lower than the surge decided by the Paris City Hall, which voted for 2023 a 52% increase in its property tax rate which, it is true, was by far the lowest of the major cities and goes the stay down from 13.5% to 20.5%. The mayor of Paris, Anne Hidalgo, has also cited inflation and the energetic crisis among the reasons for resorting to this local tax to restore the degraded finances of the City of Light.
Inflation is already applied automatically
French municipalities have until the end of March to vote their budgets and set their 2023 property tax rate. already evolves each year according to inflation at the level of the rental bases and that the finance law has not provided for any capping mechanism for 2023. All owners will therefore see the base of their property tax increase by 7, 1% this year, a figure already higher than the average change in consumer prices measured by INSEE (just over 6% for 2022). In other words, unless your city decides to lower its rate, which, we can see, would be a miracle, your property tax will increase by at least 7.1% in 2023.
double penalty
Among other major cities, Grenoble has already announced that the increase in its 2023 property tax rate will be +15% or +25%. The municipality has confirmed to us that the final decision will be made on January 31. But Grenoble was already the city to display one of the highest puncture rates at 52.63%. There is also Mulhouse, which plans to increase its 2023 rate by two points, from 41.01% to 43.01% (+4.9%). In these 4 cities, it will therefore be a double penalty for owners with an increase in both the tax base and its rate.
A political dimension
A list of cities that is likely to grow even if several observations can already be made. The first is that Paris, Lyon, Grenoble and Mulhouse are cities with a fairly low proportion of homeowners (around 30%), which allows these municipalities to limit the electoral consequences of these inevitably unpopular decisions for the residents concerned.
Furthermore, the comparison of property tax rates between cities is biased by the importance of real estate prices which determine the tax base (rental value). Paris may still display a comparatively very low rate, but it should not be forgotten that the property tax base is much higher there than in other large cities where prices are sometimes 3 times cheaper. The same reasoning can also apply to Lyon.
Tenants indirectly affected by TEOM
Finally, other factors are likely to further inflate the addition of owners (and even tenants) this year at the property tax level since it is necessary to expect for certain localities additional rate increases decided by the intermunicipal authorities ( groups with own taxation). As for the household waste collection tax (TEOM), which is paid at the same time as the property tax, its base will also be increased by 7.1% and it would be surprising not to see increases in tax rates premises due to inflation which affects the cost of waste treatment.
As for the property tax, the calculation of the TEOM is obtained by multiplying half of the cadastral rental value of the property by a rate fixed by the community, to which are added management costs. This tax can be automatically recovered by the owners from the tenants, excluding management fees. It is therefore the tenants who risk this time feeling it pass…