‘Contribution citoyenne’: What is this new residents' charge proposed by French mayors?
Return of taxe d’habitation for main homes has been ruled out but other options are under debate as communes look to raise funding
The potential charge could impact tenants and not just property owners
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A new local charge that contributes directly to commune funds may be on the horizon for residents in France.
However such charge will not come in the form of a return of a taxe d’habitation (property tax) style levy on main homes, the government has confirmed.
Instead a ‘contribution citoyenne au service public’ (local’s contribution to public service) has been proposed by the Association des maires de France (AMF) and is to be discussed at a meeting of mayors later this month.
A wider consultation on the subject will take place in 2025, although minister for territories and decentralisation Catherine Vautrin said “nothing has yet been decided,” in an interview with Le Parisien (paywall article).
Exact details on the charge are not yet known, but proponents say it could begin at a few euros per month for those on lower incomes, and be automatically deducted from earnings via a social charge.
"There could even be a mechanism to prevent it becoming an additional charge, by allowing it to be deducted from income tax, for example," said vice-president of the AMF, André Laignel.
“We need to consider as a country about how to link people’s participation with local services,” said Ms Vautrin. “Nothing comes for free.”
She said the idea of a contribution "was not ridiculous [and would] make everyone aware of the importance of the cost," of these local services.
If agreed, the charge may come into effect in 2025 or 2026, however the 2027 presidential election – in which current head of state Emmanuel Macron cannot run – may halt its implementation.
Funding issues
The issue stems from how funding is given – and the perceived lack of it – to communes in France.
Property taxes are raised and dispensed by local authorities, mostly on public services, with communes having greater autonomy over them.
This is in comparison to other taxes such as social charges, income and business taxes which are collected, managed and distributed by the central government.
Previously, two main property taxes – taxe foncière and taxe d’habitation – were levied on most properties in France.
Local authorities are partially in control of taxe foncière and taxe d’habitation.
Changes brought about by President Macron in his first term saw taxe d’habitation gradually reduced to be restricted to second homes.
Read more: Who still has to pay taxe d’habitation property tax in France?
Removing this tax "severed any fiscal link between many inhabitants and their commune, and has largely destroyed the fiscal autonomy of communes”, said Antoine Homé, co-chairman of the finance commission of the AMF.
Many mayors have said that the alternative funding coming from the central government which was supposed to match and replace the previously-collected funds does not cover costs. They say it leaves them facing shortfalls unless they implement further increases on property taxes.
Indeed, many communes have used new rules to instill additional taxes on second homes in 2024.
Read more: More owners will pay French empty home tax in December 2024
‘Nothing comes for free’
These locally raised funds contribute directly to life in the commune, including for education, essential services, and amenities.
Authorities say they cannot keep services at current levels without greater funding.
Property taxes have already increased 33% in the last ten years. However restraints on how the taxes are calculated – and the anger of property owners following successive raises – means the potential for further increases are limited.
It is expected that the proposed local contribution charge would be paid by residents living in a commune rather than just property owners, meaning those renting may face it.
“It is about linking the participation of our fellow citizens to the overall use of commune services,” Ms Vautrin said.
Note that in this context citoyenne is not being used to mean a French citizen, but a person living in a certain area (region, department, or in this case commune).
Non-French citizens would also need to pay such a charge if they fulfil its criteria.
