the Mandatory Deductions Council wants more consistency

In its report unveiled on Monday, this institution linked to the Court of Auditors advocates greater consistency on housing taxation. Several of its recommendations are likely to make owners cringe.

Increase the property tax and review the calculation bases so that residents of the richest municipalities pay more. Raise VAT on the energy renovation of housing from 5.5% to 10%. Or even align the taxation of furnished accommodation with that of unfurnished accommodation. All these proposals appear in a report presented Monday, December 18 by the Council for Compulsory Deductions, an institution associated with the Court of Auditors. The Council highlights the lack of consistency in current taxation.

Tax review

The Council for Compulsory Deductions therefore proposes to completely review the property tax base, which is used for its calculation. It is currently based on what are called cadastral rental values, almost unchanged since 1970, according to the Council. He recommends recalculating it according to the evolution of rent and sales prices, because today, he judges that it leads to inequality between households.

In short: the largest real estate assets are located in localities with lower property tax rates. We can obviously think of the example of Paris, where the price of m² of housing is the highest in France (around 10,000 euros on average) and where the property tax rate is at the same time the lowest of all large cities. The study therefore calls for a form of rebalancing.

Property tax, notary fees and energy renovation also singled out

Another recommendation from the Council on Compulsory Deductions may not please owners: increase, in general, the property tax in France, but on the other hand reduce the transfer taxes that households must pay when they acquire housing. This measure is presented as financially neutral for local authorities.

The Council for Compulsory Deductions is also opposed to measures that it does not consider targeted enough, if at all, such as VAT reduced to 5.5% on energy renovation. It proposes to increase its rate to 10%, but at the same time to reopen the possibility of benefiting from a PTZ (zero interest loan) to renovate old housing in tense areas. The idea being that this once again primarily benefits the poorest households.

Furnished properties also in the crosshairs

The Council also validates the government’s choice to put an end to “Pinel” type tax exemption schemes next year. Its cost is considered high for public finances and the system can have negative effects on housing prices.

Another recommendation, which seems to be the subject of relative political consensus: unify the tax regimes applicable to furnished and unfurnished accommodation, because they benefit owners using platforms like Airbnb.