Tax decreaseIn effectLocal business taxationNational

Halving of the rental value of industrial establishments (property tax and CFE)

Article 29 of the 2021 Finance Act amends the accounting method used to value industrial establishments (Article 1499 of the General Tax Code): the interest rates applied to cost price fall from 8% to 4% for land and from 12% to 6% for buildings and installations. The rental value of these establishments, the base of the property tax on built property and of the business property contribution, is thus halved from 2021 assessments. Municipalities and inter-municipal bodies are compensated through a levy on State revenue calculated on their 2020 rates.

Measure originators

InitiatorGVT

Bruno Le Maire

Gouvernement

InitiatorGVT

Olivier Dussopt

Gouvernement

Impact on public finances

Costs 3.3 bn €/yr2021 estimate · State

Source of the estimate: Sénat, rapport général n° 138 (2020-2021), tome II, commentaire de l'article 4 du PLF 2021 (Indirect official figure)

A positive amount is revenue or savings for public finances; a negative amount is a cost or lost revenue.

Effective date

1 January 2021

Measure impact

Businesses owning or operating industrial establishments valued under the accounting method see their property tax and CFE halved from 2021. According to the Senate finance committee report, the gross gain for businesses is estimated at €3.3bn from 2021, including about €1.7bn for manufacturing; the revenue loss of local authorities is compensated by the State.