French government announces end to taxe d’habitation by 2021

Published:  14 May at 6 PM
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Expats living permanently in France will be happy to hear the government is getting rid of the taxe d’habitation in its entirety by 2021.

The timescale is now set for the tax’s total removal with 2021 the latest date. The corresponding loss of revenue is expected to be offset by budgetary savings, thus preventing it having an effect on targets for public deficits. The first stage is already under way and will abolish the tax for around 80 per cent of all households, starting with properties owned by the least well-off. By the end of this year, 30 per cent of home owners will no longer be liable for property tax, with a total of 80 per cent of householders exempted by 2020.

According to French Prime Minister Eduarde Philippe, the tax is unfair due to its 1970s basis which didn’t take into account any development of areas or towns. Eventually, he added, the objective is to provide a more intelligent and focused local system. Formerly, President Macron had pledged not to raise any new taxes in order to offset income losses, estimated to stand at almost 25 billion euros by 2020, and he has now promised the government will make up any losses by local authorities down to the nearest euro.

The abolition of the unpopular tax was promised by Macron during his presidential campaign, aimed at 80 per cent of the least well-off households, but the expansion of the plan is still worrying local councils as they may be yet be forced to cut down on local services and amenities in spite of Macron’s earlier pledge. At the present time, no clarification is available as to whether the abolition of the tax will also apply to second homes owned by expats but used for holidays until retirement kicks in and emigration is possible. Several local English language newspapers are asking for information as regards such properties, and it’s hoped expat property owners will be included.
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