Five French property updates: undeclared extensions, slowing market

1. Tax authority eyes undeclared verandas and sheds

Tax authorities are looking to expand the use of artificial intelligence - currently being used to help track undeclared swimming pools - to identify other undeclared constructions.

The same system used to find swimming pools - a mixture of aerial photography from Google that is then cross-referenced with targeted software against information held by the tax authorities - will be used.

Top of their list are extensions such as verandas as well as garden sheds, which depending on size can be subject to an increase in local property taxes as well as a one-off payment on construction.

“It is not a question of sheds of less than 5 m² but rather of 10 - 15 m² that could be used as an additional room,” a tax authority spokesperson told Le Figaro.

This also includes other work that requires a déclaration préalable de travaux to be submitted to the mairie but that has not been declared to tax authorities, such as room extensions.

France’s main tax body, the Direction générale des Finances publiques believes around “one to ten per cent” of such extensions are undeclared and thus not being taxed as they should be.

The trial will begin in a few (as of yet unknown) departments in 2024 before being rolled out across the country.

The eyes of the authorities are also still on undeclared pools and going after these has raised around €50million in unpaid taxes for government coffers.

Figures for how many undeclared pools were captured by the scheme are expected to be published at the end of the year.

Read more: Why French mairies are turning to private firms to recoup property tax

2. France’s biggest estate agency cuts commission by 6% in a bid to boost housing market

France’s biggest estate agency group is reducing its commission fees on property sales in a bid to convince sellers to also accept lower bids and ease the slowdown in the market.

Many sellers are currently reported to be hesitant to accept bids below the asking price, causing the market to slow down considerably.

The temporary drop in estate agent commission sales is “necessary to ease the jam,” said the President of Orpi France Guillaume Martinaud.

Orpi says the number of sales fell 25% in the first quarter of 2023 compared to the same period in 2022, with further drops expected.

Mr Martinaud believes prices must fall by “at least the amount of recent inflation… between 5 and 10%.”

Orpi is therefore asking sellers to lower their asking prices by around 6% - the year-on-year inflation levels recorded in January - and pledges to reduce its agency commission fees - generally set at around 6% - by the same amount.

“We need to make a gesture,” Mr Martinaud said, “to show that if the market is freed up a bit it will start again.

More than two-thirds (71%) of Orpi-run agencies have agreed to the measure, which will apply to sellers who sign an ‘anti-inflation pact’ with their agents.

Read more: Warning for homeowners in France as monthly property prices fall

3. Resident sues city for giving construction permit for land that is too sloped to build on

A homeowner has lost a court case against the city for issuing him with a building permit for land which is too sloped and unstable for easy construction.

The parcel of land, in Besançon, Doubs - requires extensive landscaping before any construction can begin - but the authorities said the owner was aware of this.

The man had sued for €96,000 in compensation but the court rejected his claim, saying the council had warned him of the terrain issues before granting the permit.

The council had alerted him to a study by the Direction départementale des territoires (Departmental land register) about the site, showing that prior work would be needed.

The property owner had also undertaken a private survey of the land to see what work was needed before applying for the permit.

The owner had already started work at the site before realising the excess cost of landscaping and deciding to sue the council.

As well as rejecting his claim, the court ordered the owner to pay €1,500 in legal fees as well as a €500 fine for bringing the case.

Read also: No fines in 2023, says French property declaration chief

4. Hundreds sue over French energy renovation grant delays

Hundreds of homeowners have sued France's national housing agency, the Agence nationale pour l’habitat (Anah), over unpaid claims from the MaPrimeRenov’ scheme.

The scheme - which sees Ahah subsidise wholly or in part ecologically-friendly home renovations - is facing a number of problems.

Last week the Defender of Rights in France attended a hearing in the Senate over the scheme’s online failures, which was shortly followed by the court case.

The majority of the cases included late unpaid subsidies but also cases where the scheme had promised to subsidise work before later revoking payment.

“The objective is to resolve the dramatic situations caused by processing delays and unjustified rejections that both individuals and professionals in the sector suffer," said Joyce Pitcher, one of the lawyers who help homeowners with cases via the justice.cool platform.

The lawyer claims out of the 15,000 MaPrimeRenov’ applications they have looked at, 22% were denied a payment on “unjustified” grounds, and subsidies were paid out on average seven months after construction work as opposed to the promised three weeks.

Echoing the Defender of Rights last week, the lawyer also bemoaned “computer malfunctions” and “strong disorganisation” within the scheme.

Housing Minister Olivier Klein has denied the claims, saying the figures “do not reflect the efforts made by Anah”.

“The average time for payment of the aid of MaPrimeRénov' is five weeks, less than three weeks if the file is complete and three months maximum in case of reinforced controls,” he added.

He also highlighted that over 340,000 have already received a premium from the scheme, and asked those with issues to seek “free and neutral” advice through France Renov’ advisors.

Read more: Couple warn of French renovation grant ‘frustrations’

5. Mairies sell town halls to save costs

Three communes in the north of France have sold off their town halls to help tackle rising costs after merging with a fourth commune to create a new commune.

The communes - Pont-Farcy, Fervaches, Plaines-Œuvres and Tessy-sur-Vire - are situated in the Manche department in Normandy. They are small, having only a mayor and one delegate each.

Three of the communes sold their town halls with only the building in Tessy-sur-Vire remaining.

In Fervaches, the town hall was sold to a couple looking to turn it into a home, in Pont-Farcy investors bought the property to renovate and rent out and in Plaines-Œuvres the mairie was sold to an unnamed buyer.

Each of the buildings sold for around €100,000.

The new larger commune is called Tessy-Bocage.

“We are looking for economies of scale - is it worth maintaining three buildings [that are barely used]?” said Michel Richard, mayor of the new commune.

The merger has not only allowed the communes to save on rising costs, but improve access to services for residents, he added.

“The opening time of these historic town halls was one or two mornings per week. Now, the town hall of Tessy-Bocage is open almost all week, including Saturday morning.”

Read also: These are the French villages most searched on Google

Last year, the mayor of a commune in Calvados, Normandy sold the town hall building for €45,000 and merged the town hall facilities with a school.

The move allowed the commune to save an additional €2,000 per month on energy costs.

You can read last week’s property updates - including information on rising mortgage loans and new water bill obligations - here.

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