Housing: The Court of Auditors demands an increase in property tax

The French Court of Auditors considers housing taxation to be relatively high and burdens owners almost exclusively. He is also advocating an overhaul of the system so that possession is taxed more than acquisition to allow for better market dynamics, i.e. an increase in property tax.

Housing taxation is ” reflecting mandatory rainfall among the highest in developed countries », states the Court of Auditors in a report published on 18 December. Reviewing recent data, it is noted that it represents 8% of mandatory deductions in France in 2020 (around 6% in 2000) compared to 5.3% on average in Organization for Economic Co-operation and Development countries, including European countries, Canada and the USA (4.9% in 2000). Data that led the Court of Auditors to conclude that taxation in France is higher “heavy” and less “inefficient”. Yippee “disconnected from the economic value of goods”, “consolidating the market” and “not adapted to the new environmental challenges of buildings”, summary Le Figaro in its synthesis.

As such, the institution recommends a review of the system to arrive at a system that guarantees better neutrality in referrals “to tax possession more than acquisition, annuity rather than the pursuit of access to real estate”. The Court of Auditors calls more clearly for a downward revision of transfer taxes. Sages explain that this measure would create better dynamics in the real estate market.

On the contrary, an increase in these duties could be a hindrance for them and threatens to have a negative impact on the sale of real estate. This would then lead to a reduction in property ownership, which would mechanically slow down residential mobility. The report recalls the comparison with OECD countries “only Belgium, Korea and Singapore opted for a higher transfer tax”.

Departmental administration reserves

This proposal is far from uniform among entities operating on the real estate market, including departmental administration. “Transfer rights are the only resource available to departments », he confirms Figaro elected UDI Côte-d’Or (21). “The rest comes from allocations that are not indexed to inflation. We need to have real financial autonomy, which includes fiscal autonomy,” continues. A thought far removed from the thinking of sages, who additionally propose raising taxes related to ownership, especially property taxes, to compensate for the communities’ shortfall in tax resources.

from his side, Court of Auditors calls for an overhaul of the tax system, which is considered “archaic” because it is “underestimates the value of real estate in the wealthiest communities”. To put it plainly, the institution finds that the property tax “It undervalues ​​old buildings and overestimates new construction. A phenomenon visible in Paris: property tax it weighs two to three times more in Seine-Saint-Denis (93) (editor’s note, where there are more new buildings) than in Paris »regrets Pierre Moscovici, the first president of the Court of Auditors Le Figaro.

Still far from the reform planned for 2028, at the Ministry of Housing, accompanied by Patrice Vergriete, according to Le Figarowe admit that measures need to be taken to accommodate taxation “to a new model of territorial development”. “Redefining a more comprehensible and motivating tax framework in favor of investment is also a major challenge in response to the structural crisis in housing production”we still maintain.

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