Behind the hype lies a completely different reality.
Mayors often brag about it: “This year, the municipal property tax rate remains the same (or decreases, for some).” An announcement with great fanfare, which the first city councilors welcomed when they informed their residents. Boulogne-Billancourt, Montpellier, Angers, Dijon, Caen, Mantes-la-Jolie, Castres, Moissac… So many municipalities which pride themselves on not touching the owners’ wallets and not increasing their bill a little more, year after year. However, the reality is more complex and we will have to write a higher check than in 2023.
It is not yet time to pay this tax and the exact amounts have not yet been sent to the 20 million French people who must pay it. However, it is necessary to provide for it in the budget since the bill will be higher for everyone, that is a certainty. And this, despite the announcement effects. Because behind the communication lies a method of calculating the property tax which inevitably leads to an increase in the bill.
Each year, using a formula that only financial experts are able to understand, the State establishes the rental value of your property, whether it is a house or an apartment. From this amount, the municipality and the intercommunity each decide to take a percentage. A percentage is also applied, used to pay for trash collection (TEOM) and a tax for aquatic environments is also levied.
Town halls and intercommunal authorities have communicated explaining that their rate will not change in 2024. However, the amount which serves as the basis for calculation increases by 3.9%. This is an automatic increase, based on 2023 inflation. So, even if your mayor says he is doing something for your finances, you will still pay more. Two examples to understand.
In 2023, the rental value of Mr. A’s house was €1000. The city applied a rate of 15% (i.e. €150), the intercommunality rate 10% (€100), the TEOM was 5% (€50) and other taxes represented 1% (€10). In total, Mr. A therefore paid 310 euros in property tax. Good news, in 2024, all rates remain the same. But its bill will still increase since the rental value increases by 3.9%, or €1,039. The city will therefore collect €155.85, the intercommunity €103.90, the TEOM will be €51.95 and other taxes of 10.39%, for a total to pay of €322.09.
For Mr. B, it’s even better: his city has announced that it will lower its rate. But this does not guarantee a reduction in the bill. To do this, the rate must fall by at least 1.95 points, for example from 15 to 13.05% or from 40 to 38.05%. So be careful with the announcement effects to avoid a bad surprise.