Universal territorial contribution : A new tax for everyone ?

In 2023, the elimination of the housing tax on primary residences had eased the burden on many households, but this measure also created a financial hole of nearly 20 billion euros in the coffers of local authorities. Today, faced with significant budget deficits and an increase in property tax that is no longer sufficient, the government is considering a “> territorial universal contribution” (CTU). Supported by some political figures, this measure aims to rebalance local resources through contributions from property owners as well as tenants.

The proposal for a territorial universal contribution to fill a lack of earnings

The elimination of the housing tax on primary residences was seen as a victory for French households. However, the Association of Mayors of France emphasizes that this decision deprived local authorities of an essential source of funding. “Even with a 33 % increase in property tax over ten years, we cannot fill this gap,” notes the association. This increase in the property tax, which sometimes reaches dizzying proportions in certain municipalities, has not been enough to compensate for the 20 billion euros in annual lost revenue. The budget situation is becoming critical for local authorities, which also face an additional cut of five billion euros from their budget in 2025.

To address this funding crisis, Catherine Vautrin, Minister for Partnerships with Territories, introduced the idea of a territorial universal contribution. According to her, it is imperative to give local authorities a financial lever that allows them to meet the needs of their territories. “Local authorities need to regain the power to act and a better control of their revenue,” indicates her office, which thus expresses a desire to restore a certain fiscal autonomy. For the government, the CTU could be a way to offset the loss of earnings and to reintroduce, in a disguised form, a kind of housing tax.

A controversial universal tax, between support and criticism

Unlike the former housing tax, the CTU would be “universal” and would affect not only property owners but also tenants, thus making the contribution to local infrastructure and services more equitable. André Laignel, Mayor of Issoudun and supporter of the measure, believes that this new contribution could be moderate for modest households. “The amount could represent only a few euros per month for low-income households,” he asserts. He adds that it might be possible to introduce a deduction on income tax to avoid creating a tax overload. According to him, this approach would allow for a strong link to be re-established between citizens and their local authorities, making their contribution to local public services visible.

However, this initiative has sparked strong opposition, notably from Éric Woerth, former Minister of Economy, who does not hesitate to express his disagreement. “It is quite unbearable to hear those who bankrupted France tell us how to get out by taxing local authorities,” he criticizes. Moreover, he denounces what he perceives as an additional disguised tax burden. For opponents, the CTU could increase the financial burden on households without guaranteeing effective management of the collected funds. The debates around this contribution are therefore far from over and should fuel political discussions in the months to come.

The proposal for the CTU evokes as much support as criticism. While some see it as a viable solution to stabilize the finances of local authorities, others denounce an attempt to reintroduce the housing tax through another means. The future of this proposal remains uncertain, and it could well become a central point of the fiscal debate in France, whose economy is threatened by an unprecedented tax increase, reflecting the tensions between budgetary imperatives and the social acceptability of taxation.