Local tax rules need reforming
Auditor says it is wrong that residential taxes are based on 1970 property values and take no account of income
LOCAL residential taxes paid by households in France are inconsistent, unfair and unsuitable for today's economic climate, according to an official report.
The Conseil des Prélèvements Obligatoires - which is attached to the French national audit office the Cour des Comptes - said it did not make sense that the taxes were calculated on property values dating back to 1970 that have not been revised since.
The group also recommended that the annual local tax bill should be linked to household income to stop the least well-off paying the same as high-earners.
The main residential taxes - the taxe d'habitation and taxe foncière are paid in October along with the TV licence (redevance audiovisuelle).
According to the CPO report, the taxe d'habitation represents about 2% of the average household's annual income. For the richest people living in France, it accounts for less than 0.75% of their budget.
The taxe foncière is also criticised in the report. It said homes built after 1970 are considered to have a better level of comfort and are therefore taxed higher.
The CPO said this led to cases where a newly renovated Haussmann-era flat on a Paris street could have a tax bill half the size of a new-build on the same road.
The group says the property values used to calculate people's bills is in urgent need of an update and should be revised every five years.
Local taxation raised €98bn in 2008 - the last official figures published. This represented about half of local authorities' budgets, with the rest largely coming from the State.
The Connexion publishes a €5 helpguide on local taxes, updated last autumn, which is available from this link.
N.Parneix - Fotolia.com
