First hiccup in the housing tax reform

The general rapporteur of the Budget to the Assembly, Joël Giraud, asks the government to reconsider the freeze on rental values ​​provided for in the finance bill for 2020. This freeze would cut the communities of 250 million in revenue as part of the local finance reform.

Gérald Darmanin, Minister of Action and Public Accounts, and Jacqueline Gourault, Minister of Territorial Cohesion.

The Minister of Action and Public Accounts had warned that it would be necessary “Probably take some aspirin”, when the reform of local finances would be debated in Parliament. A few days before the committee debates, the first headaches begin to appear. Local elected officials discovered in the text of the Finance bill for 2020 that communities would lose 250 million euros in revenue in the game of bonneteau aimed at compensating for the abolition of the housing tax on main residences. It is “In contradiction with the government’s repeated commitment to compensate for the abolition of the housing tax” to the nearest euro “”, denounced the five associations of elected officials (AMF, AMRF, APFV, urban France and Cities of France), in a joint press release at the beginning of the week.

Freezing of rental values

The government is committed to ensuring that the disappearance of the housing tax will not lead to losers. However, the draft budget provides for the freezing of rental values ​​for the housing tax of main residences. Since 2017, these bases used to calculate local taxes are automatically revalued according to the inflation observed over the previous twelve months. This rule was suspended in the text presented to Parliament, which reduces the compensation for municipalities and inter-municipal authorities by 250 million euros.

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A straw with regard to the financial masses (17 billion euros) displaced in this reform, but the maneuver gives the wrong signal, while the parliamentary debate must still allow to set a certain number of cursors. As a reminder, the municipalities should be transferred the property tax currently collected by the departments, which would be assigned a fraction of VAT.

Do not endanger the reform

Worried about the bronca of local elected officials, the majority deputies were received this weekend by Jacqueline Gourault, the Minister of Territorial Cohesion, and Olivier Dussopt, Secretary of State to the Minister of Action and public accounts. The general rapporteur of the Budget to the Assembly, Joël Giraud (LREM), asks the government to reverse this freeze, so as not to endanger the reform for a blow of plane to 250 million euros. “I understand that the rates are frozen, but not the bases. This puts us at odds with the communities, while the reform has now been approved ”, he explains. It remains to be seen whether he will be heard. At Bercy, we consider that “The financial results of this reform are very much to the advantage of local communities”.

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INTERVIEW Budget 2020: “The reform of the housing tax will lead to more satisfactory financing for communities”