LOCAL DIRECT taxes are some of the oldest in France, and most of the daily services that people count on in cities, towns or regions are funded through a set of household levies and charges that apply across the country. The most significant are the taxe foncière, a property tax for which the owner is liable, and the taxe dhabitation, a residence tax paid by the occupant of the house or apartment (an owner-occupier must pay both).
These taxes are levied by the state but then channelled to local authorities, which themselves have the power to set the rates (up to a limit laid down in law). The amounts vary considerably, as they depend both on the rate chosen by the city or region and the notional rental value of a property. For example, a two-child household with an average income paid €444 in taxe dhabitation in Paris in 2010 compared with €1,162 in the heavily-indebted city of Marseille.
Various reductions or exemptions are provided for the elderly, students, people with certain disabilities and those on low incomes.
In addition to the two main household taxes, there are smaller levies and charges that local authorities can use to generate income for specific services. These include a rubbish collection tax (calculated from the notional rental value of your home) and a street cleaning tax (based mainly on the type of street). Households also pay for the water they use. Rates vary from region to region, but they are calculated via water meters installed in houses and apartment buildings. The system is usually managed by private companies, and their involvement in local water provision has been a source of controversy.
In Paris, household taxes account for 54 per cent of city halls tax income (the rest comes from companies and other organisations). So where does all the money go? In the capital city, the largest single spending heading, accounting for 26 per cent of the total, is La Solidarité, which encompasses all the financial help provided by the city to older people, children, those with disabilities and low-income earners.
Next come housing, public infrastructure (tunnels, bridges, street lighting, cycle lanes and so on), the environment (including parks, forests and cemeteries) and security. Local authorities are responsible for school buildings; in Paris last year, 13 per cent of spending went on renovating buildings and providing hundreds of new creche places in the city.
The French capital put aside 11 per cent of its budget - €971 million - last year for what it simply called Dynamism, a category that covers the huge range of cultural and civic initiatives, from museums and monument restoration to urban beaches and sports facilities, aimed at making the city an attractive, stimulating place to live.