Housing tax, regional revival, reduction in production taxes ... which changes on January 1, 2021

Find out what's changing on January 1, 2021

From January 1, the housing tax (TH) will be completely abolished for main residences

Since 2020, 80% of households have been totally exempt from housing tax. The remaining 20% ​​of households will be gradually exempted until the total elimination of TH in 2023.

A new financing scheme for local authorities comes into force in 2021 allowing them to be fully compensated for the loss of the income from housing tax.

Reduction of production taxes in favor of companies

As part of the stimulus policy, production taxes are reduced in favor of businesses, by halving the contribution rate on business value added (CVAE) and a new method of calculating the rental value of industrial premises. The effects on community resources are neutralized.

Gradual automation of the Value Added Tax Compensation Fund (FCTVA)

At the initiative of the Government, the finance law for 2021 provides for the gradual automation of the FCTVA from January 1, 2021. This automation consists in replacing the manual examination of reimbursement request files sent to the prefectures by an automatic calculation in a new dedicated application based on expenses charged to a set of eligible accounts. It is therefore a matter of simplification for the communities, which will eventually be very largely relieved of the transmission of specific paper files.

New envelopes in favor of recovery in the territories

After the vote of a € 1bn envelope in summer 2020 in favor of investment by the municipal block, new envelopes in favor of the recovery in the territories are adopted as part of the finance law for 2021, in addition to the traditional local public investment support mechanisms, the amounts of which are all renewed:

• € 650 million to promote the thermal renovation of municipal buildings and EPCIs;
• € 300 million for the thermal renovation of departmental buildings;
• € 600 million in favor of regional investments.

Extension of support mechanisms for regions in difficulty

Extension until 2022 of seven support mechanisms for regions in difficulty which were due to expire at the end of 2020: rural revitalization zones (ZRR), urban free zones-entrepreneurial territories (ZFU-TE), regional aid zones (AFR), investment assistance zones for small and medium-sized enterprises (ZAIPME), employment areas to be revitalized (BER), urban areas to be revitalized (BUD) and priority development zones (ZDP).

All of these zonings concern a total of 13.900 municipalities in France, or nearly 40% of municipalities.