Why will the property tax increase for all homeowners this year?

On Tuesday, the General Directorate of Public Finances (DGFIP) confirmed on Actu.fr a figure that had already been circulating for several weeks: the cadastral rental values ​​(VLC), which attend…

On Tuesday, the General Directorate of Public Finances (DGFIP) confirmed on Actu.fr a figure that had already been circulating for several weeks: the cadastral rental values ​​(VLC), which serve as the basis for calculating property tax and represent “the theoretical level of annual income that the property in question could produce if rented”, according to tax authorities, will appreciate this year by 3.4%. A record increase, the highest since 1989 (+4%).

uneven climbs

How to explain this flight? Until 2017, the annual revaluation of these VLCs was determined during the vote on the finance law by Parliament, leaving deputies and senators room for manoeuvre. But since 2018, the calculation method has changed: now, it is the evolution of the consumer price index (CPI) that serves as the basis. Clearly, if inflation is high, then the property tax increase, mechanically, is too. In February, INSEE estimated that prices, driven in particular by energy, had risen 3.6% in a year.

Wherever they are in France, owners will see their property tax increased. And the increase will not be limited to that 3.4% in many cities. As a reminder, once the national base has been determined, each municipality, as well as the inter-municipal authority, applies a local rate, decided in plenary session. Right now, voting takes place everywhere in France and from one municipality to another, the decisions of elected officials vary greatly.

Several cities are choosing, in an economic context made difficult by price increases, not to impose an additional cost on taxpayers. In the South West, this is for example the case of Bordeaux, where rates will not rise this year, but also of La Rochelle, Dax or Agen. In Bayonne and Périgueux, the increase will be 1%, in Pau 2%, in addition to the 2% decided by the agglomeration, or even 3% in the Rochefort agglomeration (Charente-Maritime). Other increases, however, are more spectacular: +5% in Ondres, in the Landes, +6.24% in Bouscat and +15% in Floirac, two towns on the outskirts of Bordeaux.

“collective effort”

In his Bouscat commune, Mayor Patrick Bobet (LR) explains this substantial increase for “three reasons”: “The first is the regular drop in our general operating allocation. We lose around 100,000 euros year after year. The next two are related to price increases. First about the investments, numerous in the city: “We decided on the principle of renovating our swimming pool three years ago. We had started on a base of 6 million euros, today we are at almost 10. Everything is like that. Prices are increasing considerably,” says the mayor.

Pressured by energy prices, operating costs are also panicking: “Although at Bouscat we regularly had an operating surplus of between 2 and 4 million, which allowed us to reinvest, today we can no longer do so”, laments Patrick Bobet. As of now, we have just enough to end up with a slight surplus. “This is what is called the second-round effect of inflation, deciphers Mathieu Plane, OFCE economist. The increase in energy prices causes an increase in production costs, transport costs, even wages… It is a set of elements that increases operating and investment costs. And normally, tax revenues are assumed to increase as these expenses increase. »

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