Local taxes increase the cost of a real estate purchase by representing the equivalent of two to three credit monthly payments a year, or effectively making the borrowing rates doubled, according to the calculations of a mortgage broker.
“When considering owning a property, the conventional calculation is to calculate the monthly credit based on the amount borrowed, adding if applicable service charges and fees,” recalls meilleurtaux.com. “Now it is clear that another item of expenditure may further strain the budget of a real estate purchase, ie the Taxe Fonciere and Taxe d’Habitation” he said in a statement .
The broker looked at the proportion that, for a household with two children, the local tax on the purchase of a property -type of 70 m2, interest rate or equivalent number of additional monthly payments. It shows that if the average borrowing rate for a 20-year mortgage is around 2% (excluding insurance), the burden of local taxation does virtually climb to 4.50% in Marseille and Montpellier, 4.10% in Toulouse, Nantes 4.05%, 3.95% in Bordeaux, Strasbourg 3.85%, 3.45% in Lille and Nice, 3.25% and 2.45% in Lyon in Paris .
And “local taxes pushed the bit rate or less two percentage points in half of major cities in France,” said Mael Bernier, spokesperson of the broker.
Converted into fictitious additional monthly payments, the local taxes may, in some cities, represent between two and three months of credit repayment in addition, over a year. This is the case in Marseille and Montpellier (almost three months), Toulouse, Nantes and Bordeaux (just over 2) and Strasbourg (nearly 2).”The cities of Lille and Nice are almost figure of ‘good students’ monthly payments with only 1.5 in addition, like Lyon to 1.2 months,” said the broker. It welcomes Paris performance that displays “less than half an extra monthly payment.”