Abolition of housing tax: the government plan partly censored

Europe 1 with AFP 10:51 a.m., March 18, 2022, modified at 10:51 a.m., March 18, 2022

The housing tax compensation mechanism for local authorities, which was to maintain their funding despite the abolition of this levy, was partly censored Thursday by the Constitutional Council, forcing the government to review its copy.

Seized of a priority question of constitutionality (QPC), the Council considered that several organizational provisions of this mechanism were in reality "contrary to the principle of equality before public charges".

This principle provides that citizens must be equal before the deductions required of them to finance public expenditure.

an "unjustified difference in treatment"

However, according to the municipality of La Trinité (Alpes-Maritimes), at the initiative of the QPC, the compensation provisions, contained in the law of December 29, 2019 providing for the progressive abolition of the housing tax, did not allow a full compensation for the resources lost by the municipalities because the calculation did not take into account the share going directly to the associations of municipalities.

The planned mechanism indeed takes into account the proceeds of the housing tax collected by the municipalities but not the fraction which could go directly to the syndicate of municipalities if they had decided that a share was due to it directly.

However, not all municipal unions have funding based in part on housing tax, which would lead, according to the applicant municipality, to an "unjustified difference in treatment between municipalities", which would therefore be contrary to the principle equality before public office.

In its decision, the Constitutional Council considered that the provisions required municipalities that financed their union via a fraction of their housing tax to devote other resources to it or to increase other local taxes in compensation, at the difference of municipalities not having made this choice of financing.

Under these conditions, he considers that "the legislator disregarded, by the contested provisions, the principle of equality before public charges" and declared "these provisions contrary to the Constitution".

These provisions are therefore no longer in force, said the Constitutional Council in its press release.

The government's response

In a press release Thursday evening, the Ministry of Territorial Cohesion and Relations with local authorities specified that this "declaration of unconstitutionality can only be invoked in proceedings brought on the date of publication of the decision and not judged definitively ".

"For the approximately 2,350 municipalities on whose territory a union product of housing tax was levied in 2017, the government will draw the consequences of the decision of the constitutional judge by proposing methods of taking into account the compensation", says further Bercy.

"This is a great victory for La Trinité, the fruit of 18 months of fierce fighting," said Mayor Ladislas Polski in a statement.

“I now solemnly call on the President of the Republic and the government to commit to concrete and rapid measures to correct this injustice,” he added.