the property tax weighs more on modest owners, according to INSEE

“Households with the most property assets pay relatively less property tax than those with the least wealth,” explains the institute.

Property tax, a source of inequality? This tax paid by households that own their homes weighs relatively more heavily on the poorest households, shows an INSEE study published Monday, December 18. The property tax on buildings (including that paid by social landlords and businesses) brought in 29 billion euros to local authorities in 2022.

While the distribution of this tax was until now little known, a new base constructed by INSEE allows “to shed light on this question”, notes the study, even if the available data currently dates back to 2017. That year, the 17 million households subject to property tax paid 19.2 billion euros, or an average amount of 660 euros per accommodation and 1,100 euros per taxable household. A total of 42% of households are not subject to property tax because they are not owners. It represented on average 0.34% of the gross real estate assets of owner households in 2017.

A progressive tax… in relation to all households

But “apparent rate” decreases as the gross real estate assets of households increase: it thus exceeds 0.5% for households with the lowest real estate assets, it is around 0.4% for households between the 60 and 90 percentiles, then it decreases to 0.22% for the 1% of households with the highest real estate assets.

This degression, underlines INSEE, is explained firstly by the fact that households with high real estate assets more frequently own housing “whose cadastral rental value is low compared to their market value”even “obsolete”like that of old housing located in the centers of large cities.

The property tax finally represents 2.5% of disposable income for three-quarters of owner households, but here again, the 20% of low-income owners devote more than 4% of their disposable income to it, compared to 1.6% for 1% wealthiest. If the property tax is reported to all households, including non-owners, it nevertheless becomes progressive, since the 10% wealthiest households pay 27% of the total and the 10% who have the highest real estate assets pay 37%.