Real Estate; A Drop in Local Government Revenues
After rising significantly—by 129%—over the past decade, transfer taxes, which account for 20% of departmental revenues, are currently down 12.5% as of the end of April compared to the previous year, according to data provided by the Association of French Departments.
This trend affects nearly all departments, with the exception of 9 of them (out of 96), according to *Le Figaro*. Paris has recorded the largest shortfall. Le Canard Enchaîné reports that there has been a decrease of more than 500 million euros in revenue for the City of Paris. According to the same newspaper, real estate transfer taxes generated 1.745 billion euros in revenue for the city in 2022.
A 346-million-euro shortfall for Paris
In Paris alone, the real estate crisis has resulted in a €500 million drop in revenue, of which €346 million is attributable to notary fees alone. According to the National Real Estate Federation, it seems unlikely that the market will recover anytime soon: it forecasts a 15% decline in sales in 2023 and, at best, stabilization of the sector in 2024, reports Le Figaro. For Loïc Cantin, president of the federation, this situation could lead to adjustments in taxation: “In these regions or municipalities, the housing tax has been eliminated. As president of the federation, I express my concern regarding the remaining sources of tax revenue. Property tax, which is borne by homeowners, as well as other potential taxes, will be necessary to offset the loss and deficit caused by this market downturn,” he explained in an interview with Europe 1.
