Property tax, a tax far from being trivial… So, what is the effect of property tax on the French budget? Meilleurtaux analyzed the weight of local taxes in the 20 largest cities in France.
The real estate market has performed very well for two years and has made many buyers happy during that period. Yes, it is the time that today seems really far away as the situation has changed. Since March, faced with a very rapid increase in credit rates, it is clear that the ability of households to meet them has been undermined. Added to this is the inflation rate, the weight of the property tax. This tax, which future buyers often ignore, can significantly affect the monthly payments for the purchase of a property. In 2021, according to the Union of Mayors in France, one in three municipalities planned to increase the property tax. So what about this year? What is the impact on the French budget? Answer with a recent study by Meilleurtaux that analyzed the weight of local taxes in the 20 largest cities in France.
The equivalent of an additional monthly loan payment per year, but it’s actually much higher costs
On average in 2022, in the 20 largest cities in France, property tax It costs 105 euros per month It represents little more than one additional monthly payment for each year of credit. This tax amounted to 92 euros in 2018, 98 euros in 2020 and 101 euros in 2021. This local tax increases the monthly payments for the credit. For example, for Nimes, Saint-Étienne, Le Havre and Le Mans, All four approach or exceed the additional monthly payments per year. Let’s look at some examples to help you understand.
For a property of 70 square meters, the owner of Nîmes over 20 years will borrow 1.85%. Payable without insurance and property tax: €723 per month. The property tax alone will cost this owner 1,551 euros a year, or 129 euros a month more. By adding this monthly payment to his balance, this owner’s monthly payment increases to €852/month, and it’s never the same again! This year’s NEM owners will have to pay more than two months of additional monthly installments for each year of loan repayment.
Real estate prices raise the note too
” It’s like they’re paying off more than 14 months of credit each year instead of 12 ! Explains Maël Bernier, Director of Communications and Spokesperson for Meilleurtaux. Compared to 2021, the monthly payments, including property tax, amounted to 800 euros. The 52 EUR The difference is not only due to the increase in property tax. Rising prices (from 1.10% in 2021 to 1.85% in 2022) and real estate prices have also driven up the monthly bill.
in the middle of the arrangement, Toulouse. The city in the south of France is in the national average. On average, a Toulouse owner will pay the equivalent of an additional month of monthly loan payment each year. In this city, the property tax costs €1,385 per year. Deduct to 12 months, it costs 115 euros per month. Excluding insurance and property tax, he must pay 1,345 euros per month. With the local tax associated with his city, the owner pays compensation of 1,460 euros. In 2021, the property tax was 1,340 euros per year. In 1 year, the property tax increased by 46 euros. In the end, with this local tax inflated, and by the amount of rates or price of real estate, the owner of Toulouse saw his monthly bill inflate by 139 euros, all things being equal!
These are the cities that did not witness a property tax change within a year
For example: Le Havre. For properties equal to 70 square metres, Le Havre pays excluding insurance and excluding property tax €818 per month of credit. Annually, the property tax costs him 1,483 euros, a monthly surcharge of 124 euros per month. Once the credit is combined with the monthly payment of property tax, the Le Havre owner will have to pay €942 per month. For him, this represents just under two monthly loan payments per year. Compared to 2021, the amount of property tax has not changed! Credit rates and real estate prices just soared in this city in Normandy. So even if this local tax doesn’t change, the owner will still pay extra this year +63 EUR/Month !
Admittedly, the local tax in these cities hardly changed, but other factors are present. This is the case of Nice, Lyon, or even Paris. If the property tax increases finally In the monthly payment to the owners within these cities it is almost painless, and the weight of the increase in prices and real estate tension in these cities on the contrary is more than at present, and the example of Paris is eloquent, for the same property of 70 m² is 484 € More a month!
” The mayor of Le Havre, like that of Paris, Nice or Toulon, did not increase the amount of property tax. The only factors in these cities driving up monthly payments are higher prices and higher property prices, especially in secondary cities that have experienced a major boom in the wake of the virus. Maël Bernier analyzes.
Once again the city of Angers was shaken by several inflationary factors. This secondary city, which has seen the arrival of large numbers of metropolitans since the Covid era, has seen its prices rise for this purpose. Added to the diminishing real estate purchasing power, the sharp rise in prices since March and finally the final blow: the property tax! This year, the owner will have to pay an additional 281 euros per month to cover all his costs. To revert to the local Angers tax, the buyer will pay €1,546 per year which comes to €129 per month. The credit, plus the monthly property tax means the owner has to pay €1,388 per month.
misleading position !
If we compare with last year’s figures, the relative weight of property tax in the purchase of real estate is not much different. As in 2021, there is the equivalent of an additional monthly loan payment that owners have to pay.
” But it is a misleading situation. ! The rates are no longer the same. Last year we hit 1.10% over 20 years and now we’re at 1.85%. And because everything has gone up, the property tax is merging into the background. If we had stayed at last year’s credit rates, the property tax would have been more straightforward ! In fact, one increase hides another! »concludes Maël Bernier.
methodology: The calculation was made for a property of 70 sq.m. (average price per city according to Seloger.com in June 2021 and June 2022) that is financed over 20 years at the average grant rate in the selected city (Source: Meilleurtaux July 2022) , with average amounts of local tax (property tax) 2022 for a couple with two children depending on the developments as stated or announced.