Will your municipality vote to impose a housing surcharge?

While some municipalities have already approved a massive increase in property tax, owners of properties other than their primary residence are also facing a 5 to 60 percent increase in the housing tax on those properties.

More municipalities have decided to impose a surcharge on these properties in 2024 to boost residential housing. A decree published in late August allows more than 2,500 additional municipalities facing housing shortages to implement this surcharge. Previously, only 255 municipalities were subject to this measure, Les Échos reported on September 30.

Some city councils have already voted to implement this surtax. For example, in Cassis (Bouches-du-Rhône), the mayor pushed through a 60% increase in the housing tax on second homes to limit the proliferation of furnished vacation rentals. This surcharge is expected to bring in approximately 400,000 euros for the city, which will be able to invest the funds in houses in the heart of the village to convert them into multiple apartments.
 

A measure with limited impact

Since 2017, mayors have been able to put such a measure to a vote if their municipality is located in what is known as a “tight housing market” area, characterized by an imbalance between housing supply and demand. However, the 2023 Finance Act (Article 73) significantly broadened its scope by expanding the definition of “areas of housing shortage” or “tourist areas,” increasing the number of municipalities subject to the surcharge from 1,152 to 3,697 (Decree No. 2023-822 of August 25, 2023). This decree also expanded the list of municipalities eligible for the annual tax on vacant housing.

Last year, only one in five affected municipalities had implemented the residential tax surcharge. Municipalities wishing to implement it as of January 1, 2024, must have passed the measure by October 1, 2023. Affected homeowners may be in for an unpleasant surprise. To find out whether their municipality has approved the measure and what the surcharge rate is, they can consult the city council’s meeting minutes or contact their city hall directly if the municipality has not provided this information. Otherwise, they will not learn of the increase until next November, when their tax bill is mailed. For example, this notice will be posted online starting November 7, 2023, for the 2022 tax year (November 20 for taxpayers paying monthly).

As of now, there are no plans to publish a table listing all the municipalities that voted in favor of the measure. When contacted, neither the Association of Mayors of France nor the General Directorate of Public Finance (DGFiP) indicated any plans to publish this list on their websites in the near future. The DGFiP has informed us that such a table should be available, but not before next spring. Taxpayers should therefore remain vigilant.