Real estate credit: 30-55 years old, the first victims of usury in 2022

Primary residence: The house tax disappears for everyone in January 2023

Unless there is a last minute government decision, the primary residence tax is abolished for everyone starting January 1, 2023. Secondary homeowners will continue to pay it and for them the increase in this tax can often exceed 20%, to which must be added the property tax which, also, should explode in 2022 and 2023 to catch up with inflation. Abolition of the tourist tax From 2023 all families will be exempt from the tourist tax on their main residence. This abolition has been implemented gradually since January 2020. In 2022 almost 80% of French people no longer pay it, after benefiting from a 30% reduction in 2018, then 65% in 2019. For 20% of the remaining families , the wealthiest from a fiscal point of view, the tax was reduced by 30% in 2021 and by 65% ​​in 2022, regardless of their income level. The payment of the tourist tax on the main residence must be made no later than November 15th or November 21st for dematerialized payments (mandatory when the amount exceeds 300 euros). Families exempt from paying this tax still receive a notice indicating that the amount is void. According to government projections, the total abolition of the house tax in 2023 will allow an average income of 738 euros per household and per year, and will affect about 24.5 million families for a tax reduction of 18.1 billion euros. Please note that the tourist tax is a local tax payable by anyone who privately occupies, on January 1st of the fiscal year, furnished accommodation, whether they are tenants or owners of the property. This tax also applies free of charge to the occupants of the accommodation. Adopted with the 2018 and 2020 financial laws, this reform of the housing tax on main residences aims to strengthen the purchasing power of the French, a premonitory measure since the examination of the bill began on Monday 17 July. purchasing power in a context marked by very high inflation in 2022. Huge increase in housing tax on second homes Owners of a second home or vacant housing are also affected by housing tax, but not its removal. They must pay by December 15th of the current year or by December 20th for online payments. The tourist tax is calculated each year on the basis of the net rental value of the property and any annexes (garage, cellar, parking space, swimming pool, annex, etc.), reduced in the context of the main residence of the property. mandatory or optional, and multiplied by the tax rate approved by the municipality and the intercommunal. If the property is located in an area with high rental pressure, the owners of a second home can be heavily affected by the tourist tax. Some municipalities already impose a 20% increase rate like Toulon, but the surcharge can go up to 60%, like in Paris, Annecy, Biarritz, Marseille, Nantes, Lyon, Nice or even Saint-Jean-de-Luz. In Bordeaux and La Rochelle the increase went from 20 to 50%. For municipalities, housing tax accounts for one third of tax revenue. Its abolition of main residences leads to a significant deficit, which Emmanuel Macron promised in 2017 to make up for “the nearest euro”. While waiting for 18 billion euros to fall per year, the municipalities are taking action by increasing the tax on housing on second homes, including the property tax, a local tax that affects the owners or usufructuaries of buildings built (homes, parking lots, boats used as a fixed point, commercial building, industrial plant, land for commercial or industrial use), even if the property is leased. The tax clamor with property tax Like housing tax, property tax is calculated from the cadastral rental value (theoretical rent amount), to which a 50% reduction is applied. This base, multiplied by a rate defined by each local authority, was revalued by 3.4% in 2022, and a new recovery is likely to occur in 2023, probably around 5%. As for the rates voted by the municipalities, their increase can exceed 5% in 2022, or even reach 13% as in Marseille where a collective of owners has appealed to the administrative court for the cancellation of the city’s decision. Between 2010 and 2020, property tax increased by 28%, an average increase of 2.8% per year, three times faster than inflation and rents over the period. Parallel to this latest real estate tax hike in 2022, landlords are obliged not to increase rents by more than 3.5% this year so as not to penalize tenants’ purchasing power. Some professionals are calling for tenants to join landlords by integrating the increased property tax into the rents.

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