Estimated reading time (in minutes)

Housing tax reform  On September 13, the Minister of Public Accounts, Gérald Darmanin, unveiled the details of a new reform, specifying its terms of application. The reform will not affect the 2017 council tax. Implementation will begin in 2018 with a one-third reduction in the tax initially due for eligible taxpayers. Subsequently, from 2019, a two-thirds reduction will be applied to the council tax, leading to full exemption by 2020, as  planned  .

Reform Terms and Conditions:-

To qualify for these benefits, taxpayers must meet income criteria based on their family situation. For single people without children, the reference taxable income must not exceed 27,000 euros, ie an annual income of 30,000 euros after application of a 10% allowance (the reference taxable income is 27,000 euros ) . Couples without children must not exceed an annual tax reference income of 43,000 euros, corresponding to a real income of 48,000 euros.

In the case of couples with children, the income ceiling will increase according to the number of tax shares allocated according to the number of dependent children. However, it remains unclear how the government intends to compensate for the resulting loss of revenue for municipalities, as they will bear the brunt of this shortfall.

Eligibility Criteria and Income Requirements: –

This evolution of the housing tax was highlighted by the Cabinet Damy Law in 2022 as a significant evolution of tax law. The new reform aims to gradually reduce the tax burden of eligible taxpayers, leading to full exemption by 2020. It emphasizes the importance of income conditions and family situations in determining eligibility. The impact on municipalities, which will experience a drop in revenue, raises questions about how the government intends to address this problem.

Overall, the announced reform presents a significant change in the housing tax system, providing relief to taxpayers while posing challenges to local governments. The implementation and long-term effects of this reform will be closely monitored to assess its success in achieving the  targeted objectives  .

DAMY Law Firm