Since March, in the face of a rapid increase in credit rates, the ability of households to meet their financial obligations has been undermined. Added to this is the property tax weight.
This local tax, which pertains to owners of built and unbuilt property, can sometimes make a huge impact on the monthly mortgage payments. A study by mortgage broker Meilleurtaux analyzes the weight of property tax in France’s 20 largest cities in 2022*.
105 euros per month on average
Whereas the property tax costs €92 in 2018, €98 in 2020 and €101 in 2021, in 2022 it is €105 per month in France’s 20 largest cities and represents on average a little more than an additional monthly loan payment each year. But its weight depends on the cities.
Saint-Étienne and Nîmes: 2 additional monthly loan payments
This year, owners of Saint-Étienne and Nîmes will have to pay more than two months of additional monthly loan payments annually.
for the property of 70 m2, an owner in Saint-Étienne over 20 years will borrow at 1.85% and will pay, excluding insurance and property tax, a monthly premium of 537 euros. The property tax alone will cost him €1,101 per year, or €92 more per month.
By adding this monthly payment to his balance, the monthly payment increases to 629 euros. It’s as if this owner was paying off “every year over 14 months of credit instead of 12!” explains Maël Bernier, Communications Manager and spokesperson for Meilleurtaux.
Grenoble, Dijon: little more than an extra monthly payment
The property tax weight for Grenoble owners this year is 1.4 monthly installments of the additional credit per year. for the property of 70 m2They will borrow over 20 years at 1.85% and will pay, excluding insurance and property tax, a monthly premium of 1,022 euros. The property tax alone will cost them 1,428 euros per year, or 119 euros more per month. By adding this monthly payment to their credit, the monthly payment increases to 1,141 euros.
In Dijon, the property tax weight represents 1.5 monthly installments of credit plus each year. For a property of this size, with a loan of more than 20 years at 1.85%, Dijon owners, excluding insurance and property tax, will pay a monthly payment of €984. The property tax alone will cost them €1,499 per year, or €125 per month more. By adding this monthly payment to their credit, the monthly payment increases to €1,109.
Nice, Lyon, Paris, Strasbourg: almost painless augmentation
In Nice, Lyon, Paris or Strasbourg, if the property tax increase in the monthly payment for owners within these major cities is virtually painless (0.5 additional monthly payment for owners of Lyon and 0.7 for owners of Strasbourg), the weight of the price increase and real estate tension in these cities is More on the contrary than in the present: in Paris, for the same property of 70 square meters, this is 484 euros per month more, in Nice 278 euros more, in Lyon 120 euros and Strasbourg 81 euros.
No more Le Havre
for the property of 70 m2, the owner of Le Havre will pay €818 per month in credit, excluding insurance and property tax. Annually, the property tax will cost him 1,483 euros, a monthly surcharge of 124 euros. Once he combines the credit and the monthly payment of property tax, he 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.
Only credit rates and real estate prices have increased in this city. “So even if this local tax does not change, the owner will still pay an additional cost of 63 euros per month this year!”, confirms Meilleurtaux.
* The calculation was made for a 70 square meter property (average price per city according to Seloger.com in June 2021 and June 2022) financed over 20 years at the average award price in the selected city (Source: Meilleurtaux July 2022), With average amounts of local tax (property tax) 2022 for a couple with two children according to the changes as stated or announced.