The Summer is nearly over, kids are back to school and your holidays seem quite distant already, that is what happens when you go back to work doesn’t it? The French have a word for this time of the year, it is called “Rentrée” literally the return. Often a time when the government passes new laws and news regulations, of course some of them will impact property management or property investments. The Sexant team has reviewed these for you and will summarise here what you have to retain for the months and years to come.
RENTING IN FRANCE
1/ Rents regulation in Paris will carry on next year. It was only implemented in the summer of 2015 and there are talks to expand this further to the whole region that is to say Île-de-France. Cities like Lille are also considering the same scheme. Basically, it sets both minimum and maximum rent price for a given properties. It is calculated from the location, the age of the building, whether the place is furnished or not and the number of rooms of course.
2/ Less financial support for around 80,000 households
On the other hand, families who are paying a high rent will get less financial support, this will affect nearly 80,000 of them all around France. The popular support often being referred to as APL will be calculated differently from now on and take into account criteria like the location of the property, the number of people living there and of course the amount of the rent.
3/ Rent back-up for population under 30
The popular scheme called Visale would guarantee unpaid rents to landlords for the first 3 years of a lease. This will now be made available to young professionals under 30.
4/ Tourist tax to be applied to hospitality platforms like AirBnB
Such platforms are under scrutiny especially in touristic places where incomes generated by the tourist tax usually are going missing. AirBnB applied it in Paris and are about to roll this out to another 20 cities in France. You will recognise other touristic hot spots here: Ajaccio, Annecy, Antibes, Avignon, Biarritz, Bordeaux, Cannes, Chamonix, La Rochelle, Lille, Lyon, Marseille, Montpellier, Nantes, Nice, Paris, Saint-Malo, Strasbourg and Toulouse.
PROPERTY FINANCING IN FRANCE
1/ Additional interest-free loan for certain types of home renovation
Following on the success of the ECO-PTZ loan, the French government is introducing a complementary loan for your home providing it is around sustainable energy and insulation. The amount of both loans combined cannot be higher than 30,000 Euros. Also you have to hire a professional who has been certified with environmentally friendly techniques.
2/ More transparency for borrowers
With very low interest rates and low property prices across France, it is no wonder that the loan industry is very active. But as of October 1st, creditors will have to ensure their contracts are extremely clear for example the cost of credits will have to be printed too.
3/ Lower rates for mortgage saving account “PEL”
This scheme is popular for buyers and the interest rate tends to vary,it was 4.75% in 1985, as of August 1st, 2016 it is set to 1%
PROPERTY DEVELOPMENT IN FRANCE
1/ Lower tax for specialty residence development
This is another recent law which is going to be extended in 2017. The Censi-Boulevard law will reduce taxation to the amount of 11% of property value. This will be deducted over a period of 9 years and the residence has to offer services for students or retired people for example.
2/ Architects become compulsory for properties under 180 square yards (150 m2)
Any properties being built by individuals now require the involvement of an architect if its surface is higher than 180 square yards, it used to be 200 square yards.
ENERGY CHANGES IN FRANCE
1/ Passport of energy renovation expands further
After Engie, another energy provider can carry out free energy audits if your home was built before January 2000. You should consider it especially since these will be compulsory after July 2017. After the summer, electricity price decreased on average by 0.5%. As for gas, it increases by 2% if it us being used for heating.