Rates bills in the main towns and cities of France have increased by an average of 2% this year, with the bill for each local tax now averaging around €900.

Home owners in France will have already received their taxe foncière (property tax) bill for 2010, which they should pay by today 15th Oct, unless they pay it on a monthly basis.

One month later on 15th November will also be the final date for payment of the other local property tax, the taxe d’habitation (residence tax).

According to the Forum pour la gestion des villes et des collectivités territoriales the average bill for the taxe foncière is €904, an increase of 2.3% over 2009, while the average bill for the taxe d’habitation is €943, an increase of 2%.

Last year, the average increase in the main towns and cities was 8%, although the general increase across the country was 6.1%.

However, as we frequently state in these pages, average figures frequently disguise wide variations across the country, as the following table amply demonstrates.

Some caution is also needed in the interpretation of these figures, as information on the rates payable and increases this year for the smaller towns and villages is not yet available.

Remember also that the rates payable on a property depend on it's notional rental value, as well as the percentage rate applied by local councils, so there is a huge variation across the country in the rates payable for different types of property, and even large differences in similar properties between different communes.

Rates Up by 65% in 5 Years?

There have been some recent reports in the French and British media on a study carried out by the Union nationale de la propriété immobilière (UNPI), who found that between 2004 and 2009 the taxe foncière in the 50 largest urban areas of the country rose by up to 65%. Over this same period the level of inflation was only 8%.

In fact, although it made a good headline for some newspapers, an increase of 65% occurred only in Paris. The next largest increase was Marseilles at 45%, followed by Saint-Denis at 32%, with the vast majority of others increasing by less than 25%.

Nevertheless, there is no doubt that in recent years the level of local property taxes have risen considerably in most areas of the country. You can find out the level by which the taxe foncière has risen in your own commune at Taxe foncière 2004-09.

The reasons for such increases lie not only in the expenditure ambitions of some local councils, but also in the gradual withdrawal of central government financial support for the delivery of local services.

Councils complain, in particular, that the government has failed to adequately reimburse them for the dramatic rise in the cost of some key social security benefits administered at a local level.

This year some councils are also suffering from the abolition of the taxe professionnelle for which, once again, many complain the government has not provided adequate compensatory funding.

No doubt some blame must also be ascribed to the sheer weight of local government that exists in France - communal, inter-communal, departmental, and regional - who all have a part to play in the imposition of these taxes.

Some recalibration of the whole edifice is slowing taking place, but there is enormous resistance to any change, and it is unlikely any major change will occur until after the presidential elections in 2012.

Rate Rebates

A system of rebates and exemptions to local property taxes applies in France, in a similar manner as occurs in many other countries.

In general, these rebates are means tested, and in the case of the taxe d’habitation, they are awarded automatically by the tax office, based on your income tax return.

You can read more about the conditions of eligibility to these rebates and other exemptions by reading our guide to local taxes shown on the link below.