Last week, François Rebsamen, a government minister with responsibility for local council services, stated that the government was examining the establishment of a "modest contribution" to finance the public services of the municipal councils (communes and inter-communal councils).
"We're not going to recreate the taxe d’habitation, no. Its removal was a good decision, it created a gain in purchasing power, we will not come back to that", said the minister. However, the path of a “modest contribution” for the “funding of public services of the commune” is to be considered in order to “renew the link” between the councils and their inhabitants.
The announcement by the minister was the outcome of intense lobbying by the local councils suffering from the loss of funding for their services since the abolition of the taxe d’habitation (occupier tax) on principal residences in 2023.
This tax was the main source of funding for the municipalities, paid by 24 million households and bringing in around €20 billion a year.
The taxe d’habitation is one of two local domestic rates, but it is now only payable by second-home owners. It was abolished for main residences by President Macron over a phased basis between 2018 and 2023.
In addition, all property owners pay the other local rates, the taxe foncière (ownership tax). Since the abolition of the taxe d’habitation, the proceeds of this tax on built property go to the local communes and inter-communal councils.
The minister did not provide any details of architecture of the new tax, either the likely amount payable by households or how it would be calculated, whether a flat-rate tax, a progressive tax based on income, or linked to the rateable value of each property, as is the case with the current taxes.
Neither were there any details of the date for the introduction of the tax, which will of course be subject to the parliamentary process. A suivre.
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