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Local Rate Levels in France in 2014

Tuesday 04 November 2014

The average rates bill in 2014 is around €2,000 per household, an increase of only about 1% on 2013, but it may be the calm before the storm.

As most readers will be aware, owners of French residential property are liable for two local property taxes (or rates), called the taxe d’habitation and the taxe foncière.

The former is paid by the occupant and the latter by the owner, who of course in most cases is also the occupier.

The rates payable are based on the notional rental value of each property, a figure which is increased each year by central government, and to which a percentage rate is then applied by the local councils.

So any change in the rates payable is made up of two components - the increase in the rateable value and the change in the percentage rate applied against this value.

According to the Forum pour la gestion des Villes et des Collectivités, the total rate of increase of the taxes in 2014 was 0.8% for the taxe d’habitation and 0.9% for the taxe foncière. This is the lowest increase for 10 years.

Almost all of this increase was made up of an increase in the rateable value, meaning that most local councils made no change to their rates.

One of the main contributory factors to this apparent benevolence was the increase in stamp duty on property sales granted to the departmental councils by the government in 2013. Part of the tax levied on such sales goes to the local departmental councils, and on average accounts for around a quarter of their income.

In addition, there was also the potentially constraining factor of the local elections next year, as local councillors will have had their electoral prospects clearly in focus.

Most commentators in France suggest that rates will need to rise significantly in the next few years, due to the reductions in grant support from central government that are planned between 2015-1017 as part of the plan to reduce the budget deficit.

Thus, a more realistic appreciation of the trend can be seen from the fact that over the period 2008-2013 the national average increase in the taxe foncière was 21.26%, made up of an increase of 9.65% in the rateable value and 10.65% in the local percentage rate.

An analysis of the average taxes payable in 2014 in the major cities and towns of France is shown on the following table.

In principle, those owning a smaller than average property will pay less than is shown, and an owner of a larger property will pay more. The charges will bear no relationship to your income, although there are concessions for those on a modest income.

The table shows that the town of Montpellier in the Herault department of Languedoc Roussillon is the town with the highest local rates in France. Paris is something of an anomaly because of the large sums it receives in business rates.

As a general rule, the level of rates in rural areas and smaller parishes is lower than those in the main cities and towns, so these figures are not entirely representative. However, they are the best there are publically available, and provide a reasonable guide as to what you might expect to pay.

TownTaxe d'habitationTaxe Fonciere
Le Havre€818
Le Mans€1,042€966
Source: Forum pour la gestion des Villes et des Collectivités.

You can read more in our guide to Local Property Taxes in France

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