The mayor of Paris, Anne Hidalgo, says she has no choice in the face of climate change, the energy crisis and inflation. He needs cash flow to “keep public services and accelerate ecological transformation”.
Paris is the first major city to announce such an increase. But others should follow: in Grenoble, the ecological municipality has planned an increase of 15 to 25%. In Lyon, the mayor has already prepared the spirits, declaring last month that an increase in local taxes was one of the hypotheses on the table. It is still too early today to make a more exhaustive list: municipalities have until March to vote on their budget.
franceinfo: Why this upward trend today?
Guillaume Gaven: First, because everything is on fire. This is what Anne Hidalgo explained in Paris: “All municipalities in France are now faced with a very difficult situation which, unfortunately, has not been taken into account by the government: no indexation of resources to take inflation into account, nor rising energy costs”.
This is for example the revaluation of the index point of civil servants, decided this summer: salaries represent more than half of the expenses of the municipalities. Faced with these increases, the government has just chosen not to put a limit on the increase in the property tax, which should therefore take off next year.
Especially since the property tax is one of the last local taxes that still exist today!
The housing tax is living its last moments – for main residences at least. It will be completely phased out next year. But compensated by the State, by payments of shares of VAT. Except that the municipalities have no control here to adjust their recipes. In short, one of the only levers that remains is the property tax – with, to be fair, the contribution on the added value of companies, a production tax which brings in 8 billion per year to the departments and municipalities. But the property tax is more than 34 billion.
Last reason, it is a great classic after an election: mayors seek to carry out the projects on which they were elected. The last municipal dates from 2020. The tax pressure had not changed the following year, due to Covid in particular. But it took 2% in 2022, according to a study by a specialized firm, FSL, which estimates that this is the largest increase since 2010. This was without counting on that expected next year therefore.