Covid-19: a third of municipalities plan to increase property tax in 2021

According to a survey by the Association of Mayors of France, made public on Monday, a third of French municipalities plan to increase property tax this year, on average by 2% or 3%, to cope with the loss of revenue caused by the health crisis and maintain investments.

A third of municipalities plan to increase the property tax this year, on average by 2% or 3%, to cope with the loss of revenue caused by the health crisis linked to Covid-19 and to maintain investments, indicates an investigation by the 'Association of Mayors of France (AMF) made public on Monday.

>> LIVE

- Coronavirus: follow the evolution of the situation Monday, May 3

Loss of revenue during the first containment

"We have a third of the communities which plan to increase the rates of the property tax in 2021", affirmed the secretary general of the AMF, Philippe Laurent, during the presentation to the press of the results of a survey carried out with the Bank of the Territories.

"We estimate that the increase in the property tax rate will be on average over all municipalities from 2 to 3%," he added, recalling that this tax is the last fiscal lever available to municipalities.

Philippe Laurent, mayor (UDI) of Sceaux, in Hauts-de-Seine, estimated that this tax increase was the consequence of the revenue losses suffered by the municipalities during the first confinement which "were not completely compensated for by the state".

According to him, the gradual abolition of the housing tax since the start of Emmanuel Macron's five-year term "is not fully compensated either".

"Creation of value and wealth"

Despite these revenue losses, "the majority of the communities questioned expressed their desire to continue their support for the recovery and to maintain their investment forecasts", underlines the AMF study, which requests the support of the State.

"The government did not understand that our communities were local economic agents who contribute to the creation of value and wealth", regretted Antoine Homé, mayor (PS) of Wittenheim, in Haut-Rhin, who co-chairs , with Philippe Laurent, the AMF's local finance and taxation committee.

Relations between mayors and the state have given rise to much friction since the announcement of the gradual abolition of the housing tax and the more recent one of the reduction in production taxes they collected, despite the commitment state to compensate for lost revenue.