Why is France . . . so expensive?
This one’s interesting. Some things in France are undoubtedly comparatively expensive – especially when it comes to taxes and Paris property. But not everything comes with a big price tag.
Food shopping is relatively expensive but wine is cheap, and – it must be said – delicious. Cars cost more than elsewhere, but public transport is frequently less expensive. Clothes tend to be pricier, but not childcare.
In fact, here’s a comparison we did of the everyday costs of living in France and the UK which will give you a clue about how things work.
As in many countries, the capital is expensive while prices for things like dinner, drinks and haircuts are significantly lower in small towns.
As for property – every so often a French ‘bargain’ comes along that hits the headlines, such as a chateau for €50,000. It is true that, particularly in comparison to the UK, property in France can be cheap. But there are hidden costs you need to be aware of, as we outline here.
Meanwhile, Covid-19 has prompted a shift away from big cities to smaller towns and rural areas, as people recognise the joy of having a garden they can spend time in.
According to a survey published in June 2020 by French opinion poll institute Ifop and housing network Optimhome on the Covid-19 crisis’ impact on the French and on their view of the housing market, 23 percent of the French said télétravail (working from home) could influence them to move. We put together this piece on France’s sudden rush to the country.
And what about taxes? Yes, they are high in France – but they’re not the highest in Europe, according to a report in June.
France’s tax revenues for 2019 represented 45.5 percent of GDP, compared to Denmark’s 46.1 percent. Belgium came third at 43.6 percent, with Ireland far away in last place, raising 22.1 percent of GDP.
Overall, France raised €1.1 trillion in taxes in 2019. For comparison, the United Kingdom only raised €852 billion.
Overall, 52.9 percent of France’s tax revenue went directly to social security funds (including healthcare) – the highest proportion of any EU member state.
Meanwhile, large French companies pay more taxes than anywhere else in the Bloc. The implicit tax rate (effective average tax burden) on corporate income was 33.2 percent in 2019, far ahead of Greece in second with 24 percent.
France is also among the European countries which impose the heaviest tax burden on high earners. The top rate of income tax including surcharges is 51.5 percent for 2021, putting France in sixth place, behind Denmark, Greece, Belgium, Portugal and Sweden.