The end of the tax housing financed by the deficit

PARIS (Reuters) – The widening to 20% of the wealthiest households of the removal of the housing tax will be partially funded by a widening of the deficit compared to the last forecasts published by the government, one can read in an article published Monday on the website of le Figaro.

This measure “will cost 10.5 billion euros to the State, which compensates for the loss of income for local communities, and “a small portion (between 2.5 and 3 billion euros) of this tax relief will be funded by the retention of the equivalent of a property tax on second homes and vacancies”, he said.

“The rest, that is to say, about $ 6.5 billion, according to the latest calculations of Bercy, will be financed by the public deficit and additional”, the daily notes specifying having been able to take knowledge of the report in preparation for the orientation debate of public finances, which must be presented next week by the council of ministers.

Result: “in 2022, the public finances will stack up to the balance and not to have a small surplus of 0.3 percentage point of gross domestic product (GDP)” as provided for in the financial trajectory established by the government in the stability programme sent to the european Commission in the spring.

No comment could be obtained in the immediate future from the office of the minister of the Action and of the public Accounts Gérald Darmanin.

But, according to Le Figaro, paris-Bercy points out that “compared to the starting point, which is the law of programming of public finances presented in the autumn of last year, there is no degradation of our objectives” in this new path.

While 40% of homes already benefit today from a total or partial exemption from the housing tax, the government has already programmed to increase the proportion of households exempt to 80% via a phasing in over three years, between 2018 and 2020.

With the extension of 80% to 100% of households in the elimination of this local tax, announced in the fall by Emmanuel Macron, the total cost of this tax cut has been increased to almost 20 billion euros.

The Prime minister Edouard Philippe had assured the beginning of may that the government failed “categorically any creation of a new tax” and had the objective that the reform “is largely financed by budget savings”.

(Myriam Rivet, edited by Sophie Louet)