Housing tax: towards a 0.9% increase in rental values

The government will accept the amendment to the finance bill which reverts to the freezing of the rental bases of the housing tax. Local elected officials were moved by a loss of revenue of 250 million euros as part of the reform of local finances.

The Assembly's Finance Committee adopted an amendment to the finance bill providing for an increase in rental values ​​of 1.009%, the latest consumer price index.

Faced with the outcry of local elected officials, the executive gave in. The government will accept the amendments to the finance bill aimed at revaluing rental values ​​for the calculation of the housing tax. “The Budget rapporteur, who is part of the majority, wants the basics to be upgraded. […] We will positively accept his amendments ”, declared the Minister of Action and Public Accounts, Gerald Darmanin, invited this Monday from “Bourdin direct”, specifying that the government was not initially favorable.

The Assembly’s finance committee last week adopted an amendment to the finance bill providing for an increase in rental values. The deputy Jean-René Cazeneuve (LREM), president of the delegation to local communities, announced an agreement with the government on an increase of 0.9%, “Closer to expected inflation”.

Freezing of rental values

These bases used to calculate local taxes are increased by the amount of inflation each year in the finance law. As part of the local finance reform which will endorse the abolition of the housing tax, the 2020 finance bill provides for a freeze on rental values ​​for the housing tax on main residences. Local elected officials denounced a knife blow to the government’s commitment that the end of the housing tax be compensated to the nearest euro. According to the associations of elected officials, this freeze would have resulted in a loss of revenue of 250 million euros for the municipalities and inter-municipal authorities.

As a reminder, the finance bill provides for the end of the housing tax for all households by 2023. A measure in the continuity of the exemption for 80% of tax households which will be effective in 2020. To compensate for the resources for the communities, the law provides for a transfer to the municipalities of the property tax currently collected by the departments , which will be assigned a fraction of VAT now directed to the State.

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