What France's 2023 Finance Law Means for Property Investors
France's 2023 Real Estate Finance Law is set to bring significant changes to the country's real estate market. From the abolition of the housing tax to the modification of the energy diagnosis, here's what you need to know about the law.
One of the most significant changes introduced by the law is the abolition of the housing tax (taxe d’habitation) for principal residences. The reform, which was initiated in 2018, has now come to an end. While the housing tax will still be maintained for secondary residences, it will no longer be applicable to primary residences. This move is expected to benefit millions of homeowners in France, who will no longer have to pay this tax.
In addition to the abolition of the housing tax, the 2023 Real Estate Finance Law will also modify the energy diagnosis. Under the new law, homes that have an energy consumption of over 450 kWh/m2 per year will no longer be offered for rent. This is a significant step towards promoting energy efficiency in the real estate sector. An energy performance diagnosis (DPE) is mandatory for the sale of a building, the signing of a rental agreement, as well as for new constructions. The new law will ensure that homes with poor energy efficiency ratings are not offered for rent.
Overall, the 2023 Real Estate Finance Law is set to bring positive changes to the real estate market in France. With the abolition of the housing tax and the modification of the energy diagnosis, the law will benefit both homeowners and tenants alike. If you're planning to buy or rent a property in France in the near future, it's important to stay informed about the new law and how it might affect you.
What Rental Investors Should Know About France's 2023 Finance Law
The 2023 Finance Law in France is set to bring changes that will affect rental investors. The Pinel scheme, which provides tax exemptions for rental investors, has been renewed until 2024, but with reduced tax exemption rates from April 1, 2023. The rates for tax reduction under the Pinel scheme will decrease as follows:
- 6 years: 12% in 2022, 10.5% in 2023, and 9% in 2024
- 9 years: 18% in 2022, 15% in 2023, and 12% in 2024
- 12 years: 21% in 2022, 17.5% in 2023, and 14% in 2024
However, the Pinel Plus scheme will allow investors to retain the 2022 tax rates under two alternative conditions. The first condition is that the building must be located in a priority district of the city policy. The second condition is that the building must meet high standards of energy performance, use, and comfort, as defined by decree. For example, the minimum surface area per type of housing must be 45m² for a two-room flat.
These changes will have a significant impact on rental investors in France. It's important for investors to stay informed about the new law and how it might affect their investments. Understanding the changes to the Pinel scheme and the alternative conditions under Pinel Plus can help investors make informed decisions about their investments. With the right knowledge and strategy, rental investors can continue to benefit from the French real estate market in 2023 and beyond.
In conclusion, the 2023 Finance Law in France brings both opportunities and challenges for the country's real estate market. The abolition of the housing tax for primary residences and the modification of the energy diagnosis will benefit homeowners and tenants alike. However, rental investors will have to navigate the changes to the Pinel scheme and the reduced tax exemption rates from April 1, 2023. It's essential for all parties involved in the real estate market in France to stay informed about the new law and its implications. With the right knowledge and strategy, everyone can continue to benefit from the opportunities that the French real estate market has to offer.