These are the cities where property taxes weigh heavily on household budgets

Landlords are starting to get used to it. Property tax goes up are once again undergoing an increase. After an increase of 3.4% in 2022 and 7.1% in 2023, this local tax will further increase by 3.9% in 2024, The FSL company reports this specialized in territorial data.

“Beyond the interest rates rising since spring 2022, which has clearly contributed to increasing the monthly bill and to this is added the property tax which continues to increase, it is clear that the bill increases year after year for owners and this will obviously be the same thing in 2024, ”reports Maël Bernier, spokesperson for Meilleurtaux.

This situation is mainly explained by inflation. Since 2018, this tax has been calculated based on the cadastral rental values ​​of the properties, revalued every year by Bercy depending on the evolution of the consumer price index (CPI). And faced with inflation that in July reached 2.3% in a year, the cadastral values ​​of rents are revalued, automatically leading to an increase in property tax.

In 2023, property tax will average 113 euros per month in the 20 largest French cities, compared to 105 euros per month in 2022. according to MeilleurTaux which examined the impact of this tax on household budgets. Published this Friday, August 2, this study nevertheless shows a large disparity depending on the municipality.

Property tax can represent several months of additional credits

To explain the weight of the land tax compared to the credit reimbursement, MeilleurTaux analyzed the average amounts of this tax in the 20 largest French cities for the purchase of a property of 70 million.2 (with a 20-year credit rate of 3.75%). Result: the cities where the property tax weighs most on the family budget are above all those where the purchase cost is lowest.

For example, a homeowner in Orléans will have to repay 1,037 euros of credit each month and also 1,568 euros of real estate tax (per year), the equivalent of an additional one and a half months’ rent. In Saint-Etienne, the burden of this tax is even heavier since a homeowner will have to pay the equivalent of two months’ rent per year: with a monthly credit of 571 euros to which are added 1,225 euros of real estate tax per year, this increases the monthly payment by 673 euros.

In Paris, this ratio is much less important due to the excessive prices of real estate. Even if the land tax has increased significantly (by 52% in 2023), this ultimately corresponds to a monthly amount of “only” 104 euros if we compare it with the monthly payment of the bank loan which amounts to 3,910 euros for the financing of a 70m².

A choice of local authorities

A Edge And Lyon even if the prices per m2 are quite similar (respectively 4,620 euros per m2 and 4,761 euros per m2), the weight of this tax on family budgets is different. Owner of a 70m2 in Bordeaux they will have to pay 138 euros per month to pay the property tax, compared to 83 euros in Lyon. A difference that is explained by the politics of the territory. Because, let’s remember, local authorities (municipalities, intercommunalities and departments) must apply the revaluation of the rental value but can then change their tax rate, and therefore further increase the property tax, if they wish.

“If the bill increases year after year, it is worth remembering that since 2023 no owner of a primary residence has paid the property tax, the bill is therefore lower overall”, jokes Maël Bernier. However, this remains an additional element to take into account, especially for first time buyers who are not used to paying a tax on top of the rent: an increase in costs to be included in the calculations”.

This year some mayors have decided to significantly increase property taxes. HA Cute we have to count on an increase of 19.18% in 2024, or even + 14.5% in Nancy and +14.1% to Annecy. Enough to allow municipalities to replenish their funds to start investment plans.

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