Development tax, often referred to as garden tax, has seen a significant increase of 8% from 1 January 2023. This significant increase, the largest since 2015, risks affecting the construction and development of many projects.
An unexpected increase
For homeowners and handymen planning work this year, the news came as a surprise. In fact, development tax has increased by 8%, creating additional financial constraints for those planning to build or renovate. This increase greatly exceeds that of the previous year, adding a financial charge is not negligible.
Understanding Development Tax
Development tax is paid for construction, reconstruction or development works larger than 5 square meters. It also applies to projects that require a prior declaration of works or a building permit. The amount of this tax is calculated by multiplying the taxable area with a flat value, indexed with the construction cost index, which varies depending on the region.
For 2023, this flat-rate value increased from €820 to €886 per square meter, and in Île-de-France it reached as much as €1,004. The total tax amount is then obtained by multiplying this result with the rates set by the local authorities: municipality, department and region.
Impact on construction projects
This increase could have a significant impact on the budgets of many development projects. Owners will now have to integrate this new financial situation into their forecasts. It is crucial to note that certain types of development, such as building a swimming pool or installing photovoltaic panels, are subject to certain ceilings.
Before embarking on a project, it is recommended to use the development tax calculation simulator provided by the government. This tool allows you to get a precise estimate of the amount to pay based on the specifics of the project and the rates voted by the local authority.
Conclusion
The increase in development tax in 2023 represents a an additional challenge for owners who are thinking about building or renovating. It is necessary to fully understand the mechanisms of this tax and to integrate these costs into the project budget in order to avoid unpleasant surprises. By using the available tools and getting information from local authorities, it is possible to efficiently navigate through this tax complexity and successfully deliver your projects.