New local fee proposed to fund French public services

Plans for a new local tax to fund public services are being considered by the government as local authorities look to plug funding gaps. 

However, the taxe d’habitation property tax will not be widely reintroduced for all property owners, and will remain as a tax solely on second homes. 

“Abolition [of the tax] was a good decision, it created a gain in household purchasing power, and we are not going back on that,” said Minister for Regional Development François Rebsamen in

an interview with Ouest-France on Sunday April 27 (paywall article).

However, a “modest contribution” to “finance local public services [and] renew the link” between inhabitants and their commune is now on the table.

It comes amid plans to simplify the lives of both residents and elected officials in France, with French MPs recently debating a ‘simplification bill’ for citizens.

Such plans were first brought up for consideration last November by the Association of French Mairies (AMF) in the form of a ‘citizen’s tax’ (contribution citoyenne) with the government of

then-prime minister Michel Barnier open to the idea.

This contribution could be scaled to match the income of a household – as opposed to the value of a property as was the case with taxe d’habitation – with modest income earners being charged

lower sums. 

Other ideas included making the tax a social charge, deducted at-source.

In addition, the charge could be levied on inhabitants rather than owners, being paid by renters and not landlords (as is the case with property taxes such as the taxe foncière) – a

particular difference in major cities where a large sector of the population rents. 

Further discussions are expected, and the plan of Catherine Vautrin – currently Work Minister, but Minister for Partnership with Local and Regional Government under Michel Barnier – to host

consultations on the topic this year is likely to be followed through. 

The abolition of taxe d’habitation on all but second homes has led communes across France saying they are now suffering from reduced funding. 

The tax – one of the few collected directly by local authorities – was said to be matched by additional government funding, but thousands of communes say the replacement amounts are lower

than the taxes they previously collected.