1: ‘Noisy’ heat pump prevents property sale
A homeowner in France saw a sale of his house fail due to the noise of its heat pump (pompe à chaleur).
A potential buyer of the €700,000 house in the Yvelines department liked every aspect of the property except the ‘noisy’ pump, which prevented him from making an offer.
In the five months since that potential buyer (the visit happened in April), the seller has not found a buyer despite signing a compromis pre-sale agreement for the purchase of a new home he wished to move to.
Eventually, he had to cancel his purchase, losing a 10% deposit made on the new property.
He called the experience a “catastrophe” that had left him tens of thousands of euros out of pocket.
The would-be buyer was not just being picky about the noise but was aware of the fact that it could be breaking noise pollution laws.
The average heat pump emits a noise of between 45 and 65 decibels, according to energy company Engie, but pollution laws state a continuous noise above 50 decibels should not be produced by “any person, animal, or thing.” during the hours of 7:00 - 22:00.
Although the noise of a heat pump might be merely an annoyance in rural areas, in more densely populated departments such as the Yvelines, which is filled with commuter towns populated by Parisian workers, the pumps could be breaking noise pollution levels.
“We are hearing dozens of stories like this," said Audrey Zermati, Strategy Director of Effy, an energy renovation specialist.
On Sunday (September 24) President Macron announced France would triple production of heat pumps, alongside encouraging more homes to make the switch away from traditional boilers.
However if more homeowners struggle to sell properties in an already difficult market due to the presence of a heat pump, take up could be limited.
Earlier this year, a court case regarding a heat pump accident led to hundreds of thousands of euros in compensation.
A heat pump that was not effectively maintained by its owner caused a patch of black ice in a communal courtyard. A resident slipped on the ice, causing a severe and permanent injury.
2: Tax benefits cut for Airbnb renters
The tax benefits of hosting guests in Airbnbs, gites, and other star-rated accommodation is set to be reduced – but no further restrictions on owning the properties are due to come into force.
Rather than imposing any extra restrictions on short-term let properties, such as reducing the number of days they can be let, the plan is to reduce the 71% tax allowance on rental income for these kinds of properties to 50% – the same rate as for unrated properties.
These changes are not coming through the 2024 Finance Bill - but will be proposed separately in parliament via amendments at a future date.
The €188,700 annual income limit for short-term let properties would not change.
The change will “relieve congestion in the traditional rental market, which has seized up, particularly as a result of the explosion in this new type of property,” said the Finance Ministry.
The measure could affect around 100,000 properties which are used exclusively for short-term letting, especially those in areas popular with tourists.
However, not all owners of short-term lets will be affected.
“The majority of furnished tourist accommodation is not classified therefore the owners of these will not be affected by the change to this allowance," said Aurélie Sultan, a property lawyer.
The news is unlikely to placate those calling for further limits on Airbnb-style lets, especially in areas where long-term rental accommodation is scarce.
Some communes such as those in the Basque Country are already imposing their own strict regulations on owners of short-term let properties in the area.
Earlier this week Brian Chesky, the CEO of Airbnb, encouraged Parisians and those in the Île-de-France region to put their homes and spare rooms up on the site during the Olympic Games, which will be held in the capital next summer.
“There are not enough hotel rooms in Paris to accommodate everyone," he said.
"Surveys suggest that 20% of Parisians are interested in hosting during the Games.
“If they put their homes on Airbnb and there is enough accommodation, prices will remain reasonable."
Around 16 million people are expected to visit the city during the Olympic Games. Airbnb became an official partner of the Games in 2019.
Read more: Rent controls coming in for Pays-Basque
3: MP calls for pause in capital gains tax on second homes
A politician is calling for a one-year suspension of capital gains tax and social charges on the sale of second homes.
The move is a bid to encourage owners contemplating a sale to go ahead perhaps earlier than planned and thus free up property which could instead be used as main homes.
Daniel Labaronne of President Macron’s Renaissance party has proposed the idea.
Currently, capital gains on sales of second homes are exempt from tax only after 22 years and from social charges after 30 years of ownership. There is a sliding scale of reductions for length of ownership leading up to these points.
The MP is therefore proposing that for 2024 neither capital gains tax nor social charges are applied to second-home sales. The standard rate for these are 19% and 17.2% respectively, although social charges are reduced to 7.5% for people living in EU countries and the UK.
The idea is to increase the number of properties available on the market for long-term rental or to buy as a main home.
France is currently struggling with what many have dubbed a “property crisis”, with rising morgage interest rates and fewer sales. Come people think the solution involves reducing the number of second and vacant homes in the French housing stock.
There are estimates that around 18% of the total housing stock in France falls under one of these two categories.
Mr Labaronne is considering tabling an amendment when the 2024 Finance Bill is brought to parliament, which is set to happen in October.
The 2024 Finance Bill will cover financial laws corresponding to the 2024 fiscal year.
4: Finance Minister confirms energy-inefficient rental ban timetable
Finance Minister Bruno Le Maire has ruled out changes to the timetable on banning energy-inefficient homes from being rented despite previously claiming to be in favour of a change.
In a recent interview, the minister said he agreed with pushing back the ban on renting ‘F’ and ‘G’ rated properties on the DPE energy scale “particularly for [properties situated in] apartment blocks.”
The current timeline will ban ‘G’ rated properties from being rented out from 2025, and ‘F’ rated properties from 2028 until work is undertaken to increase their energy efficiency.
Mr Le Maire added that the ban “was possible when money was available [to renovate properties but] is becoming impossible with (finance) rates as high as they are.”
However the minister claims he was speaking “in a personal capacity” during the interview and his comments were not an indication that changes to current plans were on the horizon.
“There is no question of modifying the timetable as it has been determined,” he said.
Landlords have been lobbying for changes to the timetable, which they see as costly and restrictive, especially when combined with other limitations such as the 3.5% cap on rent increases.
For many renovations to bring properties in line with energy efficiency requirements could cost tens of thousands of euros.
This cost may not be recovered by increased rent achievable after completed, especially before further restrictions on letting ‘E’ and ‘D’ rated properties will eventually come into force.
Many would opt instead to sell the properties, leading to a reduction of property available to rent in a market where housing is already in short supply.
One potential move – which the government is currently researching – is taking properties “step-by-step” up the energy efficiency ladder, instead of all changes being required immediately.
“We are in the process of looking at whether upgrading a property from G to F requires major works,” said Housing Minister Patrice Vergriete.
This way more minor changes could be made to the estimated 670,000 ‘G’ rated properties, bringing them up to an ‘F’ level before 2025 when the ban on renting them will come into force.
Further improvement will be needed to take the property to a ‘D’ or ‘E’ level before 2028 when ‘F’ rated properties cannot be made available for rent.