In France, Everyone Pays; in Italy, Primary Residences Are Exempt

This is undoubtedly the most striking difference between the two countries: in France, property tax applies to all real estate, including a homeowner’s primary residence. Every property owner is required to pay it, regardless of whether the property is occupied, rented out, or vacant.
In Italy, however, IMU is generally not levied on a primary residence, except in certain specific cases, such as properties classified as luxury homes. As a result, the tax mainly applies to second homes, vacant properties, and rental properties.
The outcome is a significant tax relief for many Italian households, which pay no local property tax on their main residence—a policy widely viewed as direct support for household purchasing power.

Two Very Different Methods of Calculation

In France, property tax is calculated based on the property's cadastral rental value (valeur locative cadastrale), which is theoretically intended to reflect the annual rent the property could generate. The problem is that these values are largely outdated, often relying on data dating back to the 1970s. Although a reform has been discussed for years, it remains a politically sensitive issue that successive governments have been reluctant to tackle.
In Italy, IMU is also based on a cadastral value (rendita catastale), but one that is updated more regularly. This value is then adjusted using a coefficient established by law. The applicable tax rate varies from one municipality to another, generally ranging between 0.76% and 1.06%. In France, local authorities are free to set their own rates, which explains the significant disparities between municipalities—and the sometimes dramatic increases seen in recent years.

Rising Tax Pressure on Both Sides of the Border

In both countries, local taxation has tended to increase, particularly since the pandemic. In France, the gradual abolition of the residence tax (taxe d’habitation) has prompted municipalities to seek alternative sources of revenue, often turning to property tax. Some major cities have raised their rates by more than 10% in a single year.
In Italy, municipalities facing reduced state funding are increasingly relying on IMU, especially in coastal and tourist areas where second homes are abundant. In these locations, IMU has become not only a source of revenue but also a regulatory tool—and, in some cases, even a deterrent.

Two Different Visions of Local Taxation

These differences reflect two distinct approaches to local taxation.
In France, local taxation remains largely centralized, with assessment bases determined at the national level while tax rates are voted on locally. This often creates a level of complexity and opacity that many taxpayers find difficult to understand.
In Italy, the system is generally perceived as more transparent, although it is not without criticism, particularly regarding the tax burden in certain regions.
Meanwhile, several French local officials are calling for a comprehensive overhaul of the property tax system to make it fairer and easier for taxpayers to understand. However, with the 2026 municipal elections approaching, the issue remains highly sensitive.

Property Taxation Under Pressure—and Under Scrutiny

At a time when household purchasing power is under strain and housing shortages remain a major concern, property taxation has once again become a hot-button issue. Whether in France or Italy, homeowners and local authorities alike are having to navigate increasingly difficult trade-offs. One thing is certain: comparisons between the two systems are likely to continue fueling debate, especially as Italy is increasingly cited as a model for its management of public finances.