Airbnb trends, taxe foncière increases: Five French property updates

We also look at what three recent court cases mean for buying a house en viager, giving someone usufruit of your property and getting rid of tenants

We look at five updates affecting property owners in France
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Average price of an Airbnb in France is €142/night

Data from holiday rental platforms in Europe have confirmed 2022 as a buoyant year for tourism, including in France – although travellers’ tastes in property are changing.

All but one country – the UK – recorded a rise in occupancy compared to 2021, with Hungary, Portugal and Norway seeing the biggest growth.

France ranked 15th, with holidaymakers here booking a total of 86 million nights on Airbnb and Abritel, another popular holiday rental platform, last year.

The average price per night in France was €142, 26% higher than in 2019 but 13% down on 2021.

Read more: Tourism tax: €148m paid to French communes from Airbnb stays in 2022

The statistics, from specialist research group AirDNA and reported by BFM, showed a preference for smaller properties, such as flats, compared to houses or villas. Shared rooms were particularly popular, with an increase in bookings of around 18.4% last year.

It also found that while the occupancy rate increased in all price levels, it was higher for the low budget and economy ranges.

"This suggests that travellers are increasingly looking for more affordable options in the European short-term rental market, and those who would book luxury rentals may be travelling further afield," said AirDNA.

Airbnb and similar platforms regularly face criticism in French tourist hotspots, where residents accuse it of pushing local property prices beyond affordable levels and of creating ghost towns of second homes to rent.

Read more: The French tourist cities taking a stand against Airbnb-style lets

Buying en viager: court rules over vendor’s illness

A quirk of the French property market is the strong trade in en viager purchases, where you buy a house but the seller continues to live there until they die, receiving a lump sum and a monthly payment, called a rent, while they do so.

A viager sale essentially means gambling on the life expectancy of the former owner: how much you pay depends on how long they live.

Read more: Buying and selling a home in France: What is the viager system?

If the seller dies within 20 days, their heirs can seek to annul the sale but not, a court ruled in January, if this time period is exceeded – even if the seller was ill when she signed the contract.

In this case the heirs had argued that the buyer, a relative of the deceased, was aware of her compromised state of health, which required permanent medical treatment.

By paying a lump sum of approximately a fifth of the value of the property, the seller must have been confident he was getting a bargain, they said.

It would have taken 13 years of ‘rental’ payments for the price paid to correspond to the total value, the heirs’ argument continued.

Instead, the seller died three months later, but France’s highest court, the Cour de Cassation, insisted on January 18 that this was not grounds to annul the sale.

The judges pointed out that the seller’s underlying health condition had not been established as life-limiting in the short-term – and that, indeed, she had died following a fall rather than as a result of the illness.

They also questioned how confident the seller could have been about her medical prognosis, considering that he was not a doctor.

Viager cases are often in French courts. In December we reported how a sale was cancelled in Montpellier after an estate agent was found to have taken advantage of a pensioner to buy her flat at half the price it was worth.

And in May a firefighter stood trial for the alleged murder of a 92-year-old woman whose property he had a viager contract on.

Read more: ‘Viager’ buyer accused of murdering owner to get French property early

Grenoble residents braced for substantial rise in taxe foncière

After weeks of speculation, the city of Grenoble confirmed last week (January 27) that it will increase the municipal part of its taxe foncière by 25% this year – on top of a 7% rise in the base rate nationally.

Read more: One in five French mayors considering local tax rises in 2023

Taxe foncière (property ownership tax) bills are recalculated each year based on the amount that the property could in theory be rented out for – this is its valeur locative cadastrale (VLC), and an annual increase (this year of 7%) is applied to VLCs based on the consumer price index.

To obtain the tax bill, the VLC is halved, to take account of expenses such as maintenance, insurance and repairs, and then this has a percentage rate applied to it which can be adjusted up or down on the decision of the mairie and/or intercommunal bodies.

It is this commune percentage rate which is set to increase by 25% in Grenoble.

Read more: Taxe foncière France’s local property tax: Who pays and the exemptions

Authorities say it is justified to fund projects that will accelerate ecological transition.

"We have already done this by reducing the need for energy by 40% through investments,” Vincent Fristot, the deputy mayor in charge of finance, told France Info.

“We have to continue in this direction, to green the city, because summers to come will be even hotter.”

Critics, however, argue that the need for ‘ecological transition’ was identified some eight years ago, with nothing done, and that the rise could not come at a worse time for Grenoble residents as the cost of living crisis continues to bite.

In a press release, the municipal opposition group Nasa (Nouvel Air, socialists and related) said it risked "weakening many low-income Grenoble residents, retirees with modest pensions, and also those in the middle class”.

To compensate for the tax hikes, Grenoble authorities are said to have announced aid for less well-off homeowners.

Read more: Exemptions and reductions extended for the taxe foncière in France

It is estimated the increase will net some €44million of extra funds, some of which will go towards making admission to the city’s three main museums free.

Taxe foncière increased by 4.7% on average in France’s 200 biggest towns/cities in 2022, and Paris has already announced further rises in 2023.

Read more: Where has taxe foncière increased the most in France in 2022?

Read more: Paris taxe foncière rates to rise by 50% next year

Usufruit rights end when the donor dies

France’s highest court has ruled against a man who tried to stop his siblings from claiming any benefit from their mother’s property on her death.

The man, who has not been identified, was given usufruit – the right to enjoy and draw income from a property without owning it – by his mother while she was still alive.

On her death, he considered that this right had become part of his estate but the Cour de cassation ruled otherwise in January.

A parent can give a child the usufruit of a property, judges said, but this ceases on the parent’s (the donor’s) death – not the recipient’s.

Read more: Can we annul usufruit before selling a house in France?

At that point, the usufruit must be shared among siblings or co-heirs, reports BFM.

The court said that it supported their claim for compensation from the moment they all became equal beneficiaries of the property, ie. from their mother’s death.

Splitting ownership of a French property into usufruit (effectively a life interest) and nue-propriété (residual ownership) is relatively common in French estate planning.

In those instances it is the parent who has the usufruit – by retaining a life interest, they can remain living in their home.

When they die, whoever owns the nue-propriété becomes the absolute owner.

Tax payable by the recipient at the time of receiving a nue-propriété gift is lower than if inheriting the same property later, as the value of the gift takes into account the fact the beneficiary does not have full rights to the property.

Flat landlord cannot remove tenant for grandson to move in

The tenant of a Paris flat has won his battle not to be evicted to make way for his landlady’s grandson.

The landlady, who has not been named, gave her tenant notice to vacate the property in July 2021, on the grounds her grandson wanted to move to the city for an internship.

In March 2022, when the tenant refused to go, she applied to the Paris courts for an eviction notice, reports Le Figaro.

Read more: French MPs vote for tougher anti-squatting rules to protect homeowners

However the tenant, who had been renting the property for six years, argued that the decision to repossess was not sufficiently justified.

He demanded the landlady give proof that her grandson, who was a student in Troyes at the time, had a genuine reason for needing to move to Paris, such as an internship agreement or job offer.

The case was settled in December but only picked up by media outlets last month (January 18) when it was shared on Twitter by a representative of the Fondation Abbé Pierre, which works to give disadvantaged people access to decent housing.

The court ruled in favour of the tenant, saying that the presentation of a certificate from the grandson’s university in Troyes, and a description of his engineering course, did not satisfactorily explain why he needed to move to Paris.

It also noted that there had been no testimony from the grandson confirming his desire to move.

As such, the court ruled that a non-renewal of the lease was not justified and declared the notice to vacate the property null and void.

The same tenant had previously won a reduction in rent from his landlady after discovering a more than 5m² discrepancy between the surface area indicated on the lease and the property’s actual size.

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