Mortgage Credit: Think Property Tax for 2022!
When buying a home, few people think of property tax among the purchase costs. Wrong, because it can represent up to two monthly loan payments. The bill is steep in 2022, with a significant increase of more than 10% of this local tax in certain cities. Broker Meilleurtaux assessed the weight of the property tax in the borrowing family’s annual budget. Property tax: on average €105 per month Advice to future buyers: Don’t forget to include property tax in your acquisition budget. Each focuses on the property’s price, location or even condominium fees and takes a back seat or even withholds property tax altogether, this local tax collected each year by municipalities and local authorities. Pour un appartement de 70m2 financé par un crédit immobilier sur 20 ans au taux nominal de 1,85% (hors coût assurance prêt immobilier et coût des sûretés), le courtier Meilleurtaux a évalué le montant de la taxe foncière plus 20 from France. It costs an average of €105 per month, or the equivalent of an additional monthly loan payment annually on top of other loan fees. That’s an extra €4 compared to 2021 and €13 more than it was in 2018. And you might say a few more euros! Sure, but as mortgage rates soar in 2022, these expenses indirectly increase the cost of the mortgage, and in a highly variable manner depending on the region. Property tax: up to 2.1 monthly loan payments per year Among the 20 largest cities in France, Paris has the “lightest” property tax. At €770, it increases the monthly loan repayment by €64 per month and represents 0.2 monthly payment for one year. At the other end of the spectrum, Nîmes: Buying a 70-square-meter apartment in the county of Gard requires you to pay a property tax of 1,551 euros, which increases the monthly payment by 129 euros per month, or the equivalent of an additional 2.1 monthly payments to be paid per year. In Saint-Étienne, where real estate prices are much lower, the tax is also 2.1 months of mortgage credit. Here is the weight of the property tax in the number of mortgage months to be paid in the 20 largest municipalities in France: Weight of cities Property tax Property tax Increase in monthly payment Nîmes 2.1 months 1,551 € 129 Saint-Étienne 2, 1 month € 1,101 € 92 Le Havre 1.8 months 1,483 € 124 Le Mans 1.7 months 1,214 € 101 Dijon 1.5 months 1,499 € 125 Toulon 1.4 months 1,296 € 108 Grenoble 1.4 months 1,428 € 119 Montpellier 1.3 months 1,585 € 132 Angers 1.2 months 1,546 € 129 Reims 1.2 months 1,221 € 102 Marseille 1.1 months 1,281 € 107 Toulouse 1 month 1,385 € 115 Nantes 1 month 1,480 € 123 Bordeaux 0.9 months 1,541 € 128 Rennes 0.8 months 1, 129 € 94 Lille 0.7 months 896 € 75 Strasbourg 0.7 months 1 € 009 € 84 Nice 0.6 months 1085 € 90 Lyon 0.5 months 923 € 77 Paris 0.2 months 770 € 64 Property tax is not included in the calculation of the debt ratio, which should not exceed 35% of the net income of the borrower, but it constitutes an expense which is assumed which adds to the other fees under l housing (loan fees, co-ownership fees, home insurance) , and reduces the family’s living expenses by the same amount. Between soaring interest rates, eroding rates for 2022, real estate prices not weakening, and this property tax increase in 2022, it’s not time to celebrate future borrowers who are seeing their real estate buying power eroding a little more. Property Tax 2022: A significant expected increase in property tax for all owners or beneficiaries of built property and is generally paid in October to taxpayers who have not opted for the monthly payment of this tax. This tax is calculated every year and depending on the characteristics of the housing and the place in which it is located, this tax is accompanied by three other taxes: TEOM (household waste removal tax) and TSE (special equipment tax) that helps finance regional infrastructure, TASA (annual surcharge private) related to public transport financing. With a violent return to inflation in 2022 and the abolition of all housing tax on primary housing from January 2023, some municipalities will have significant control over the property tax next October. The country is increasing cadastral values by 3.4% for this year, a record for 33 years, after a hypothetical recession in 2021 (0.2%). This flat rate revision stems from the evolution of the Harmonized Consumer Price Index (HICP), which moves with inflation (+5.8% over one year at the end of June 2022). This coefficient of 3.4% is applied to the areal rental value of the dwelling, which is then divided by two and then multiplied by the overall rate voted on by the communities (the city rate, the inter-municipal rate and the district rate). Between 2010 and 2020, property tax jumped by about 28%, and from one municipality to another, the differences in rates are large. In 2021, the overall property tax rate was set at 13.5% in Paris and 53.92% in Grenoble. Despite the gradual abolition of the housing tax, the majority of cities chose not to pass on the revenue loss to taxpayers, but the inflationary drift would undoubtedly decide otherwise. The property tax for 2022 will thus rise by 12.6% in Strasbourg, 14% in Marseille and 15% in Tours, between municipalities where the increase will exceed 10%.