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Plan for cap on French taxe foncière increases to be abandoned

The government had said that it would present the scheme this autumn, but the idea was met with opposition from local authorities

Government plans to introduce a cap on the rate at which a property’s valeur locative cadastrale – used to calculate taxe foncière – can rise has been abandoned, according to Le Figaro Pic: ilolab / Shutterstock

France’s government is to abandon plans for a cap on the rate at which the taxe foncière property ownership tax can rise each year, according to a report from Le Figaro. 

Over the summer it was announced that the government was working on a mechanism that would limit the yearly increase of a property’s valeur locative cadastrale – the theoretical rental value used to calculate the base taxe foncière rate – in 2023.

This year, the valeur locative cadastrale of all properties was increased by 3.4% across the country, because it is tied to inflation, which was at 3.4% in November 2021. 

However, it reached 5.9% over a year in August, and estimates suggest that the valeur locative could increase by 6-7% next year if inflation continues at the same rate, which would mean an additional €50 on an average bill of around €853. 

In order to protect property owners, the finance ministry had said that it would integrate a cap on valeur locative rises into the projet loi de finances budget this autumn, but this was met with opposition with local authorities, which faced seeing their local tax revenues reduced as a result.

The government has therefore told Le Figaro that the option is no longer on the table, and that it “did not want to go against local authorities”.

Taxe foncière is paid by around 32 million property owners in France. Local authorities apply a rate which they decide to the base amount calculated using the property’s valeur locative, and this year, more than a quarter of large towns and cities increased these local rates, by 1.9% on average (but in some places by as 19%).

Read more: Some French towns raise taxe foncière by up to 19%, others stay level

Some local councils have decided not to introduce an increase, but people in Nantes have seen an 8% rise, people in Strasbourg 9%, in Tours 11.6%, in Marseille 13.1% and in Mantes-la-Jolie (Yvelines) 19%.

Those who pay taxe foncière and manage their bills online should all be able to see them in their account now. Paper bills were being sent out to those who pay annually this month, and in October for those who pay monthly.

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