Property tax: is it becoming a tax on real estate wealth in disguise?

Property tax has been increasing for years, sometimes very quickly. For many owners, it now seems like a real tax on their real estate assets, well beyond its initial purpose. We decipher this evolution and the ways to limit its impact.

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📈 Evolution and current context

The constant rise in property tax is fuelled by indexation to inflation. The tax base increased by +17% between 2021 and 2025, and by +23.2% since 2016, only thanks to the annual revaluation (Source: All about my finances).
Added to this are the increases voted locally. In 2025, the minimum mechanical increase is +1.7% due to inflation.
The result: an additional billion euros for cities. In 2024, the property tax on built properties brought €55.3 billion, paid by 33 million owners (Source: DGFiP), confirming its structural weight.

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🏘️ A burden that weighs more heavily on modest households

For many modest homeowners, the tax is heavy. It represents up to 4% of disposable income for low-income households, while it only reaches 1.6% for the most affluent.
This regressive nature is reinforced by the fact that property tax applies to everyone, with no asset exemption threshold, unlike the IFI.

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⚖️ Property tax, a “disguised IFI”?

The IFI concerns net real estate assets > €1.3 million. Today, 164,000 households are subject to it. In comparison, property tax affects tutti the owners and increase for the majority of them.
In some areas, the sum of these two taxes accumulates: in Paris, where the tax has jumped by +83% since 2013, and in Strasbourg where it has increased by +52% over ten years (Source: Legal news).
This combination extends fiscal pressure to a wider circle than that traditionally associated with IFI.

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🌍 Focus cities: concrete examples 2025

Here are concrete examples of municipal rates in 2025:

For example, if the rental value of a Parisian apartment is €10,000, its property base (after 50% reduction) is €5,000. With a rate of 20.50%, this gives €1,025 property tax.

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💡 Why the increase?

The increase in property tax does not come from the sky. It results from a set of combined mechanisms, some of which are completely beyond the reach of municipalities... while others depend on their political decisions. Let's decipher these three major factors.

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Revision of cadastral bases: the silent engine

The basis for calculating property tax is based on the cadastral rental value good. This value, which is supposed to represent the theoretical rent that the property could generate, is automatically revalued each year by the State, in line with the Harmonized Index of Consumer Prices (HICP).

Between 2023 and 2024, this revaluation was set at +7.1%, one of the largest increases in the last ten years. This means that, even if your municipality did not vote for an increase, your tax may have increased sharply. According to the DGFiP, more than 80% of the national increase in the TFPB in 2024 comes solely from this technical reassessment, not voted locally.

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Concrete example

An owner in Lyon with a cadastral rental value of €10,000 saw his base increase by €710 in one year. At a constant rate (for example 30%), this represents 213€ more tax, without any decision from the town hall.

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Local decisions: local authorities adjust the pressure

In parallel with national revalorization, each municipality can decide to increase its rate. In 2024, 16.7% of municipalities did it, according to UNPI. This increase can vary by 0.5 to 5 points depending on the city, often to compensate for the abolition of housing tax or to finance local investments.

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Examples:

• Saint-Étienne voted for an increase of +15% in 2024, which caused property tax to jump for a majority of owners by around €200 to €400 more.
• TO Besancon, the increase was +7%, voted by the municipal council to make up for an operating deficit.
• TO Nantes, the municipality maintained its rate, but the owners still saw an increase due to the national effect.

The difficulty for taxpayers comes from rollup between increasing bases and local decisions. A simple +1 local rate point, combined with a national revaluation of 7%, can lead to increases of more than 10% in a single year.

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Inflation and automatic revaluation: the ratchet effect

Each year, the finance law establishes a minimum increase rental values. In 2025, it is set at +1.3%, well below the 2023 peak of +7.1%, but still active. This mechanism works even if rents stagnate or fall. It is a Ratchet effect : the tax base never falls.

And even if inflation slows down, this system guarantees a systematic increase of the property tax, whether the municipality wants it or not. Over ten years, this accumulation effect is visible. According to UNPI, between 2013 and 2023, property tax increased by:

• +60% in Paris
• +42% in Tours
• +35% in Grenoble

Even in cities where public services or investments have not evolved at the same speed, taxation continues to rise.

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In summary

✔️ More than 80% of the 2024 increase comes from automatic revaluation.
✔️ Nearly 17% of municipalities are adding a local increase.
✔️ The cumulative effect can represent +10 to +20% in one year in some cities.
✔️ And no decrease is expected if rents stagnate or the real value of the property decreases.

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🔧 How to react to this fiscal pressure?

With property taxes constantly increasing, many owners are wondering about the levers available for reduce their bill, or at least do not suffer passively from the increases. Two main areas are emerging: changes in the legal framework (future reforms) and individual approaches that are available today.

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Ongoing reforms: towards a fairer system?

The most anticipated reform is that of cadastral rental values, announced for 2028. The stakes are high: these tax bases, calculated using data from the 1970s, no longer reflect the reality of the current real estate market. Result: of huge lags between two comparable properties in different cities, or even between two neighborhoods.

Concrete example

A 60 m² apartment in a Haussmannian building in Paris can have a cadastral rental value very close to a 1980s home in Angers, simply because the historical scales have never really been updated.

This reform is therefore aimed at reduce these distortions, and to make property tax more readable. But be careful: it may also increase the tax for goods that are currently undervalued... hence the fear of a transfer of burden to the most tense areas.

At the same time, several fiscal proposals are being discussed in Parliament for index the IFI entry threshold to inflation, or for cap property tax as a percentage of income, as is already the case in other European countries (Germany, Netherlands...).

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Recommended individual actions: what you can do right now

Even without waiting for a comprehensive reform, it is possible to take action. Here are three concrete solutions, accessible to any owner, with moderate effort but with real savings potential.

1. Request a review of the land base

If you estimate that the rental value of your property is too high compared to the market, you can send a Request for correction at your property tax center. This may be relevant if:

• Your home was misclassified during the initial calculation
• The property has significant defects that are not taken into account (poor insulation, nuisances, structural defects)
• There are errors in the cadastral description (area, number of rooms, outbuildings, etc.)

Real example

An owner in Montpellier has obtained a 15% reduction in its property tax after showing, with supporting photos and diagnoses, that his apartment was located on the dark and noisy ground floor, contrary to the initial assessment.

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2. Optimizing your ownership: SCI, dismemberment, joint ownership

If you own several properties, or one property of great value, you can consider a legal arrangement to reduce taxation:

• The SCI (Société Civile Immobilière) makes it possible to distribute shares between members of the same family, to anticipate the succession and sometimes to obtain a discount on the taxable value.
• Dismemberment of property (usufruct/bare ownership) allows you to transmit all or part of a property while maintaining use or income.
• Managed indivision can also be used to share costs and organize management more easily.

example

A 65-year-old couple gives bare ownership of their house to their children, while maintaining the usufruct. Result: the taxable value is reduced by approximately 40% (according to the tax scale), which relieves the IFI... and anticipates inheritance taxes.

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3. Benefit from exemptions related to energy renovation

If you make energy saving works in your main residence or in a property intended for rental, you can benefit from a partial or total exemption from property tax for 3 to 5 years, according to the municipality.

Main conditions:

• Work greater than €10,000 including VAT over one year (or €15,000 over 3 years)
• Building completed before 1989
• Exemption amount voted by the municipality (optional)

Concrete example

In Toulouse, an owner has completely renovated the thermal insulation of her old building. With the city applying a 50% exemption, she saved €680 in property tax for 3 years, more than €2,000 in total.

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🎯 Conclusion

Property tax continues to rise: on average, it has jumped by 33% in ten years, and exceeds today €1,200 per year in several big cities such as Paris, Nice or Saint-Étienne. However, this increase is not inevitable.

By understanding the mechanisms that increase it (revaluation of bases, local decisions, inflation) and by acting on the available levers, it is possible to Take back control. By requesting a revision of the database, by intelligently renovating their property or by optimizing ownership (SCI, dismemberment, etc.), some owners manage to reduce their tax of 15 to 40%.

And the future also brings reasons for hope: a major reform of cadastral values is expected for 2028, with the ambition of making property taxation fairer, more legible and better distributed among taxpayers.

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❓ FAQ

Can you challenge a property tax increase from one year to the next?‍

No, you can't argue with the overall increase itself. On the other hand, you can request a review of the rental value if you notice an error in the cadastral description (area, number of rooms, condition of the property...).

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Does property tax increase after work has been done on my house?‍

Yes, if your work increases the rental value of the property (expansion, construction of a swimming pool, attic development, etc.), your property tax can be recalculated upward. On the other hand, energy renovation work may give rise to temporary exemptions.

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Are second homes taxed more than primary homes?‍

Yes. Many municipalities apply a housing tax increase on second homes, but also higher property tax rates. Paris, Bordeaux or Biarritz, for example, target these properties to fight against the shortage of permanent housing.

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