In some cities, the property tax represents the equivalent of nearly two additional monthly loan payments, points out the broker Meilleurtaux in a study.
It is a tax that can have a strong impact on borrowers’ budgets when it comes to doing the accounts. The property tax, a tax collected each fall by the State and donated to local authorities (municipalities, intermunicipalities and departments), continues to increase, for an overall increase of 28% between 2010 and 2020. And 2022 is no exception. the rule, cities like Marseille, Tours or Nantes having already announced new double-digit increases.
It is in this context that the broker Meilleurtaux publishes this Wednesday, July 27 a study on the weight of local taxation in the 20 largest cities in France. Result: “On average in 2022, in the 20 largest cities in France, property tax costs 105 euros per month and represents the equivalent of a little more than one additional monthly payment per year real estate credit. This tax was 92 euros in 2018, 98 euros in 2020 and 101 euros in 2021”, reveals the Meilleurtaux study.
Costs are rising in Nîmes and Saint-Étienne
Significant disparities are nevertheless noted: in Nîmes, Saint-Étienne or even Le Mans, the property tax sometimes represents the equivalent of two additional monthly loan repayments. For example, in Nîmes, a borrower who would take out a mortgage over 20 years at 1.85% to buy a property of 70m2 at the price of 144,970 euros is now reimbursing 723 euros per month, excluding insurance and property tax.
The property tax amounts to 1,551 euros. “It’s as if they were reimbursing each year more than 14 months of credit instead of 12 ! explains Maël Bernier, director of communication and spokesperson for Meilleurtaux. In Saint-Étienne, where the property tax is on average 1,101 euros, this also represents a little more than two (2.1) additional monthly payments for a borrower who reimburses 537 euros per month (excluding insurance) for a property of 70m2 .
|Cities||average annual property tax cost||monthly payment* (excluding insurance)||equivalent in monthly loan payment|
|Nimes||€1,551||723 euros||2.1 additional monthly payments|
|Saint Etienne||€1,101||537 euros||2.1 additional monthly payments|
|Le Havre||€1,483||818 euros||1.8 additional monthly payment|
|Le Mans||€1,214||701 euros||1.7 additional monthly payment|
|Angers||€1,546||1259 euros||1.2 additional monthly payment|
* for the purchase of a property of 70m2 depending on the price of real estate per m2 in the city in question.
Inevitably, the impact of property tax is much lower in cities where borrowers have significant monthly loan payments. Thus, in Paris, not only is the average property tax twice as low as in Nîmes (only 770 euros) but the monthly loan payments are also often much higher. As a result, the property tax does not represent only 0.2 more monthly payments for a Parisian borrower.
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The monthly payments of the latter are however not stable in 2022 compared to 2021. “The mayor of Le Havre, like those of Paris, Nice or Toulon have not increased the amount of the property tax. The only factors in these cities that increase monthly payments are the rise in credit rates and the rise in real estate prices,” notes Meilleurtaux.
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