Insee Analyses · December 2023 · n° 91

Households with the highest housing wealth pay relatively less property tax than the least affluent households

The property tax on homes and outbuildings owned by households is a tax calculated as the product of a tax base, set by the tax administration, and tax rates voted on by local authorities. Its revenues are allocated to local communities and contribute to funding public services that benefit the local population. In 2017, 17 million households were subject to property tax, with an average amount of 660 euros per dwelling and 1,100 euros per household. This amount increases with income: the top 10% of households contribute 27% of the total, and the top 10% with the highest real estate wealth contribute 37%.

The property tax appears as a regressive tax when compared to the value of housing wealth: households with higher housing wealth pay relatively less property tax than those with lower housing wealth. When related to disposable income, it presents a stable profile at 2.5% for three-quarters of households owning at least one dwelling. It exceeds 4% for the 20% of homeowners with the lowest incomes and is below 2% for the top 1% of the wealthiest.

Additionally, the portion of disposable income that households dedicate to property tax varies significantly depending on their place of residence: it is higher in the outskirts than in the city center and higher in the Southwest and Mediterranean regions than in the West and East of France. Affluent households with the highest wealth own properties in areas where real estate is more expensive, and where property tax rates and bases, often outdated compared to housing prices, are generally lower on average.

Examining property tax based on the wealth or income of households should not overlook the fact that it is primarily a revenue tax benefiting local communities, connecting local taxpayers with the public services they consume.