French property tax revenue soars as more communes opt to levy surtax
Taxe d’habitation on second homes – one of France’s main local property taxes – brought in €2.4billion last year
Revenue went up by almost €1billion in one year
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Taxe d’habitation (TH) on second homes – one of France’s main local property taxes – brought in €2.4billion last year, compared to €1.6billion in 2018, a government study shows.
This, however, does not take into account the abolition of TH on main homes (accounting for more than 90% of residential property), which in 2018 raised €15billion.
Mairies, for whom property taxes are an important source of revenue, were compensated by allocating them a part of TH that was formerly due to departmental councils, plus state grants.
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There are several reasons for the hike in TH on second homes, including inflation-related annual increases to theoretical annual rental values assigned to properties (valeurs locatives cadastrales), used as the basis for calculating TH.
Another reason is that councils have, on average, put up their own percentage rates applied to these from an average of 16.7% in 2018 to 19.8% in 2024.
Finally, far more councils are now permitted to levy a TH ‘surtax’ (from five to 60% on top of the bill), due to a wider definition of eligible ‘under-pressure’ zones. This was formerly limited to large urban areas, but since last year it includes an additional 2,263 communes, especially coastal towns and villages popular with tourists.
Among 3,697 communes now allowed to levy a surtax, in 2024 39% voted to do so, making 1,450 communes in total, compared to 218 in 2018. The average surcharge also rose, to 41% from 25.6%.