France property news: Interest rate rise, tax row, MaPrimeRenov’ woes

Town introduces €500 daily fine for illegal building work

A town in northern France is cracking down on people who build extensions without the required permission - by issuing them with fines of up to €500 a day

Those found building on land or expanding property in Goussainville, Val-d'Oise, without the correct permission will have a certain number of days to rectify the issue (by applying for the property or stopping constructions).

If the date passes, however, daily rolling fines will be introduced for those guilty.

In the case of construction without prior permission, the daily fine is €100. For carrying out “work that does not comply [with the granted] permission”, it is €50.

In some cases – like the construction of a property extension despite an announcement that the building must remain in its original state – the fine will reach €500 per day.

The town’s urban planning department has also hired somebody to detect violations within the commune.

“We always give a deadline. The idea is to push for regulation and only then will we impose fines if people don't play along.” said deputy town planner Abdelwahab Zigha.

“We hope it will be the last case scenario [to fine property owners],” he added.

The municipal council has seen 300 cases of planning permission infringement and is “overwhelmed” by the numbers according to Le Figaro.

There are also concerns from opposition councillors that the fines will penalise small homeowners instead of landlords renting out unsuitable accommodation at excess prices (and continually expanding their properties to increase the number of tenants).

Read also: How do I know if flat listing respects French rent control rules?

MaPrimeRénov’ site continues to see technical issues

Six months after publishing a report citing issues with the government’s site for ecological home improvement subsidies, the French Défenseure des droits (Defender of Rights) Claire Hédon said the problems remain “far from being solved”.

MaPrimeRénov’ has been in place since 2020 to provide subsidies to mostly low-income homeowners looking to make eco-friendly renovations.

However, the official site has been plagued with technical bugs, including difficulties in creating a file or account, uploading supporting evidence, and modifying elements of existing files.

Ms Hédon said she has received nearly 900 complaints since publishing a report on the scheme’s problems last October, during her appearance in front of a Senate committee on the matter last Thursday (April 13).

Many of these complaints centre on the website’s inaccessibility.

The malfunctions lead to “serious consequences for users”, she said, specifically for old and “vulnerable” applicants.

In response, France’s national housing agency, L’Agence nationale de l'habitat, said it had “implemented very concrete measures to respond [To Ms Hédon’s October report] and, more broadly, to improve the quality of the service provided to users."

In particular, they said measures included "the introduction of enhanced support for the oldest files in difficulty”.

The Senate committee denied Ms Hédon’s request for a non-digital alternative to access the scheme.

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

New water bill obligation for landlords and co-property managers

New regulations mean that building managers will have to provide copropriétaires (those living in flats with shared communal spaces) with at least one non-individualised water bill per year.

The change will allow residents to see the overall water usage of the property.

This will also apply to landlords if their tenants do not have individualised water bills or live in a shared building with a co-property manager.

The regulations also include forwarding a statement on the property’s tap water quality, sent to either the landlord or co-property owner by the commune or relevant water control establishment.

These will have to be shown at least once a year to tenants or co-owners – for example, at the annual general meeting for the property.

Under previous rules, there was no obligation for a tenant to see water bills for the property, as they were either managed by the landlord or by the co-property owner, who decided the payment structure for the building.

Co-properties constructed since 2007 must also provide individualised water bills to co-property owners.

Read more: France drought: Macron wants water prices that punish those who waste

Homeowner loan interest rates rise above 3% for the first time in almost a decade

Mortgage interest rates for new loans rose to 3.04% in March – the first time they have gone above the 3% threshold since 2014.

The report published on Tuesday by Crédit Logement also said that the rate of loans taken out had fallen by 30% in the first quarter of the year compared to 2022.

The dip in loans “is more pronounced than that observed during the financial crisis of 2008, or during the first [Covid-19 lockdown]”, said the report.

The figures differ from the Bank of France’s estimations, which put the interest rate at 2.52% for March.

Both of these figures are much higher than the beginning of 2022, however, where both parties put the rate at just over 1%.

“Access to the market is becoming more and more difficult, both for borrowers with little personal contribution and for wealthier households,” the Crédit Logement’s report added.

The current rate would see an individual who borrows €150,000 over a 20-year period have to pay around €50,000 in interest payments.

In a bid to increase the number of loans granted, a number of measures have been taken – such as the Bank of France updating the usury rate monthly instead of quarterly – but some believe more changes need to be made.

The Ministry of Finance is looking at scrapping some borrowing regulations – originally meant to protect against over-indebtedness of young borrowers, they may now be obstacles to accessing loans.

You can read Crédit Logement’s report (in French) here.

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

2022 taxe foncière hike annulled in Marseille

The increase of the taxe foncière in Marseille has been deemed invalid by the administrative court.

Despite the ruling, however, the city council has said they will not reimburse landlords who had already paid it.

The council originally said they would not increase taxe foncière payments but inherited a “difficult financial situation”, leading to the 16.2% hike as they scrambled to counter a €50 million budget deficit.

Property owners fought back, claiming such a rise was unjust, subsequently taking the city to court over the issue.

The administrative tribunal ruled that the information submitted on 2022’s budget was “insufficient” to justify the tax hike.

It is the first time the city’s budget has been called into question by the court.

The council has until September 30 to appeal the ruling, and deputy finance minister for the city Joël Canicave said the council is “going to regularise the situation between now and then”.

This will include further votes on 2022’s budget.

Property owners are unsatisfied with the ruling, as the council is not reimbursing some of the 125,000 landlords affected by the raise.

“It is a decision that is not favourable to us," said lawyer Jacques Golbert, who worked with over 200 property owners to launch the complaint.

“The story is not over,” he added, hinting that property owners will continue to fight for a tax refund.

Read also: Controversy as Grenoble hikes its share of property tax by 25%

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