The record increase in the farm index, combined with a sharp rise in property taxes, will mean a very hefty bill for farmers in 2023.
The ministerial decree of July 18, 2023 (published in the Journal Officiel on July 21) has calculated the 2 indices used to determine the overall index of changes in farm prices.
The gross farm income index is 115.99, up 7.50% from 107.89 in 2022.
The gross domestic product index is 117.16, up 2.87% from 113.89 in 2022.
The average of these 2 indices gives a national farm index of 116.46, up 5.63% on the previous year.
As explained in our article on calculating rent, and in the specific article on calculating rent for vineyards, it is not enough to apply the 5.63% increase to calculate the increase in rent payable.
You also have to take into account the share of property taxes and any discounts from which the tenant benefits. And the bill will be very steep for farmers in 2023! In fact, the cadastral value, which serves as the basis for calculating property tax, has risen by 7.1% in 2023. In addition, many local authorities have increased their tax rates (notably following the disappearance of the taxe d'habitation).
| Year |
Index |
Index Varaiation |
|
2009 |
100,00 |
Base |
|
2010 |
98,37 |
-1,63 % |
|
2011 |
101,25 |
+2,92 % |
|
2012 |
103,95 |
+2,67 % |
|
2013 |
106,68 |
+2,63 % |
|
2014 |
108,30 |
+1,52 % |
|
2015 |
110,05 |
+1,61 % |
|
2016 |
109,59 |
-0,42 % |
|
2017 |
106,28 |
-3,02 % |
|
2018 |
103,05 |
-3,04 % |
|
2019 |
104,76 |
+1,66% |
|
2020 |
105,33 |
+0,55% |
|
2021 |
106.48 |
+1.09% |
|
2022 |
110,26 |
+3.55% |
|
2023 |
116,46 |
+5,63% |
There are two calculation methods:
Calculation formula: Farming price N = Farming price N-1 x (1 + Index variation)
Example (1):
The rent on October 1, 2022 was €1,633.48.
On October 1, 2023, the rental price will be : 1,633.48 x (1 + 5.63%) = 1,633.48 x 1.0563 = €1,725.44.
Calculation formula: Farming price N = Farming price fixed in the lease x Index N/First index published after the lease was signed.
Example (2):
The lease signed on October 1, 2010 stipulated a rent of €1,500.00.
On October 1, 2023, the rental price will be : 1 500,00 x (116.46/101,25*) = 1 725,33 €.
*The reference index is that for 2011, which was the first published after the lease was signed.
A number of factors also need to be taken into account when calculating the amount of rent, including property taxes.
Landlords can ask their tenants for a partial refund of the property tax on the rented property.
The method of calculating this reimbursement must be specified in the rental contract. If not specified in the contract, the tenant must reimburse his landlord :
Since 2006, agricultural properties have benefited from a 20% reduction in property tax, which must be passed on to the owner. In this situation, therefore, the lessee reimburses the owner only for the Chamber of Agriculture's share of the tax and the 8% management fee.
If the share of property tax payable by the farmer under the rural lease is higher than 20%, the calculation should nevertheless be made by deducting this 20% reduction.
There are a number of abatements or reductions in property tax on agricultural land, particularly for Young Farmers. When a landowner rents his land to a Young Farmer, a Young Farmer property tax rebate line may appear.
This property tax rebate is not intended as a thank you to owners who have leased their land to a Young Farmer. The landowner must pass on this saving to his tenant by applying an equivalent reduction to his rent receipt.
