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Taxe d’habitation to be removed for high-income households

There was some bad news for higher income households in President Macron’s July 14 interview: the removal of the taxe d’habitation planned for all main residences by 2023 might be delayed, he suggested – but this was then ruled out a few days later by new Prime Minister Jean Castex.

The delay would have affected higher income households (around 20%). They are now on target again to benefit from a 30% reduction in the tax in 2021, 65% in 2022 and then full exemption in 2023.

Could the removal of taxe d’habitation be delayed?

Other households will see the tax disappear as of this year following reductions in 2018 and 2019. In the interview Mr Macron pledged that he would not use tax increases to deal with increased state expenditure this year linked to Covid-19. He said: “If you talk about tax increases people stop consuming, doubt sets in and the country won’t take off again.” However he said there is a “possible option” of “putting off for a bit the removal of the taxe d’habitation for the most well-off.”

French second home owners: capital gains tax cut explained

However Mr Castex later stated that the calendar will be maintained as previously planned.

The removal of taxe d’habitation does not concern second homes, which will continue to attract the tax in full. In addition, in communes with housing pressures, notably larger cities where rents, prices and demand are high, mairies may impose increases of 5-60% for their part of this tax, ie. most of it. A lesser part goes to an inter-communal body in some areas.

You can check affected areas at service-public.fr/simulateur/calcul/zones-tendues.

Kentingtons: why France is surprisingly tax-friendly for individuals

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