Anti-Airbnb bill, drought damage: Five French property updates

We also look at what is stopping people from making their homes more energy efficient, why the idea of a Covid ‘exodus’ from cities to the countryside is false and more

We look at five updates affecting property owners in France
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Anti-Airbnb legislation tabled to help counter housing crisis

The favourable tax regime for people renting out furnished property short-term on sites like Airbnb could end under proposed new legislation.

At the moment, these types of rentals are considered as a commercial activity, unlike classic unfurnished rentals, which generate property income.

As such, the revenue they bring in can benefit from a tax-free allowance of up to 71% in some cases, provided it does not exceed a ceiling of €176,200.

A new bill proposed by Socialist MP Iñaki Echaniz aims to stop this, although rural gîtes would retain their tax advantage in a concession hoped to win over more parliamentary support.

The move is part of a growing backlash against tourist accommodation sites like Airbnb in France, which many fear are exacerbating the housing crisis in popular resorts.

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

Under the new proposals, “the flat-rate rebates for furnished rentals would no longer apply to furnished tourist accommodation (but only to long-term furnished rentals).”

It adds that “the tax expenditure corresponding to this allowance is clearly incompatible with the objectives of housing policy”.

Other measures contained in the proposed bill to combat "rental speculation and promote access to housing in areas under pressure" include compulsory registration of furnished tourist rentals in a national register and lowering the number of rental nights allowed for main residences from 120 to 60.

Mr Echaniz would also like to curb the growing number of landlords imposing nine or 10 month leases on tenants in order to rent out their properties for higher rates to tourists over summer.

Read more: Airbnb trends, taxe foncière increases: Five French property updates

There is no guarantee at this stage that the proposed bill, registered last week (February 14), will be put on the parliamentary agenda, but Socialist MPs are asking to discuss it during a "cross-party week" in May or June.

Aurore Bergé, leader of President Emmanuel Macron’s Renaissance party in parliament, recently spoke out in favour of reform.

Le Monde reports that on February 1 she told a conference organised by the Fondation Abbé Pierre, which works to give disadvantaged people access to decent housing, that “it is not normal to have a tax system that favours renting out one's flat for tourism”.

Drought damage prevention will cost less than repairing properties, report advises

A report on how drought damage can be financed in future has called for more investment in ways to prevent properties getting cracks in the first place.

More than 10 million homes in France are currently at risk of structural damage from soil contracting during prolonged periods of dry weather and then swelling with rainfall (a phenomenon known in French as retrait-gonflement des argiles, or RGA), according to the Bureau of Geological and Mining Research.

Read more: Ten million homes in France risk structural cracks after heatwaves

Homeowners can claim from their insurers for this under the catastrophe naturelle (natural disaster) scheme. However, there are real fears that the increased frequency of droughts in future may mean the scheme will no longer be able to cover pay-outs by 2040, reports Le Figaro.

The insurance industry federation France Assureurs has estimated that drought episodes in France in 2022 alone will likely cost between €1.9 and €2.8billion, a record since the creation of the catastrophe naturelle provision in 1982.

Read more: France’s ‘catastrophe naturelle’ insurance system: how to claim

Time, then, to focus on reducing the incidence of RGA rather than throwing money at repair work, argues a new report by Senator Christine Lavarde, which was examined last week (February 15) by the Finance Committee.

Although techniques already exist, "many of them have not yet fully proved their effectiveness as they have not been deployed on a sufficiently large scale and have not been monitored over a long period of time", the report says.

However, it argues these measures may be more cost-effective than fixing damage after the event, estimating the average cost per property would be around €10,000. By contrast, repairing a crack can sometimes cost more than building a new house.

The preventative measures work by retaining water in the soil, either by limiting evaporation or by installing root barriers to stop plants and trees from drawing it.

Senator Lavarde proposes the money to research these solutions more thoroughly could come from the Barnier fund, set up to support protection and prevention measures for property and people exposed to major natural hazards. RGA is currently not included in its remit.

The report also criticised a recent government proposal to introduce tighter constraints on exactly what drought damage pay-outs can be used for.

Read more: Moves to improve compensation for drought damage in homes in France

It argued that demolishing a damaged home to rebuild elsewhere would sometimes be more appropriate than undertaking repair work. However, homeowners who want to do this would not be granted compensation for it under the new plans.

Lack of tradespeople and advice among reasons cited for stalling on energy efficiency renovations

People looking to improve the energy efficiency of their homes in France are being put off by difficulties finding certified tradespeople, co-ownership challenges and simply not knowing what work would make the most difference.

A survey of 1,652 homeowners by Le Figaro found some 63% of respondents have undertaken energy renovation work or are planning to do so.

However, many are frustrated that their best intentions are being thwarted – and not simply for financial reasons.

Read more: French eco-renovation grants increase as price of materials rises

Finding good tradespeople to carry out the work was among one of the main reasons cited for delaying renovations.

Currently, professionals in the building and renewable sector who have been certified for quality (reconnu garant de l’environnement, or RGE) represent just 5% to 16% of the total number of companies, depending on counting methods.

Indeed, the start-up Heero, a specialist in energy renovation financing which recently mapped the accessibility (within 30 minutes) of RGE professionals, found they can be even rarer depending on where in France you live.

In Provence-Alpes-Côte d'Azur, it calculated, only 1.3% of companies are RGE and 1.8% in Île-de-France. This is compared with 7.6% in Pays de la Loire, 7.4% in Bourgogne-Franche-Comté or Brittany and 7% in Normandy.

According to Le Figaro, another common complaint is the lack of renovation advice available.

Some 61% of those surveyed said they would like to know what work would help them improve the energy score (diagnostic de performance énergétique, or DPE) of their home, calling for better access to affordable, quality advice.

Read more: Make sense of new energy audits for property in France

Meanwhile, respondents in shared apartment blocks (copropriétés) cited additional challenges.

At present, two thirds of co-owners must agree to work being carried out for a renovation project to go ahead, although the government is currently looking at ways to make it easier for residents to push renovations through

Read more: France looks to make eco-renovations easier for flat owners

The survey also found that despite a raft of government subsidies to support energy efficiency renovations, 68% of respondents said they did not know exactly what grants they were entitled to.

Read more: Explained: How to apply for a renovation grant for your French home

This is despite the fact 60% of them are counting on state aid to start their work.

Landlord unable to evict tenant after tolerating flat’s occupancy for too long

France’s highest court has denied a landlord’s attempts to evict the occupant of his flat, insisting that letting him live in the property for so long is tantamount to a verbal rental agreement.

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

The flat previously served as company accommodation for the occupant, who was a former employee of the landlord.

When this person retired, however, the landlord continued to accept rent and let him remain in the property, reports Le Figaro.

The cour de Cassation ruled last week (February 15) that by doing so the landlord had effectively given the untitled occupant of his flat a new residential lease in lieu of the old occupation agreement.

Establishing a new legal relationship in such a way cannot usually be presumed – instead a new contract should be drawn up and signed by both parties.

However, in this case the judges felt that the landlord’s behaviour showed that he had accepted the existence of a verbal agreement, which as such gave the occupant the rights of a legal tenant.

Covid’s ‘urban exodus’ is a myth, study finds

The notion that the pandemic started a mass exodus from cities to the countryside is false, according to a new study – but it did accelerate pre-existing migration trends.

The study, entitled ‘Urban exodus: a myth, realities’, found the departure of people from major urban centres, particularly the largest metropolises, to other areas, primarily smaller towns and suburban areas, was already at work before the crisis.

It noted that 43% of departures recorded in the first 12 months of the pandemic were to cities with at least 200,000 inhabitants.

Conversely, moves to more rural areas accounted for just 18% of the total number of departures in that period – just a single percentage point increase compared to before the pandemic.

Read more: House prices soar in medium-sized cities in France due to Covid

The study, carried out by researchers from the Plateforme d'observation des projets et stratégies urbaines (Popsu) and published last week (February 17), also found people were being lured to the coast, particularly the Atlantic coast, well before Covid.

While it did not deny that rural areas saw a strong increase in net migration after the start of the health crisis, it emphasised that the phenomenon was more marginal than many people imagine.

Most of the moves were between towns of the same size and more than a quarter were within the same municipality.

Regarding the typical profile of people who moved as a result of the health crisis, the report found that the demographic was more diverse than previously thought, including those in precarious financial situations or in early retirement as well as the stereotype of wealthy ‘upper class’ households.

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