New Tax Incentive for Landlords Letting Property in France from 2017
In an effort to curb rising rents, Emmanuelle Cosse has pledged a greater tax incentive for those letting property in France’s sought-after areas. Her amendment to the budget for 2017 proposes tax-exempting up to 85% of rental income in areas with high property tension.
Recent figures showed 3.8 million people in France are in inadequate housing, while 3.1 million properties lie vacant. About two million are in habitable condition, while 900,000 of these are in sought after areas. These are the properties that France’s housing minister Emmanuelle Cosse measure is targeting.
The housing minister added article 23 to the amendments to the budget for 2017, which will be voted on in January. It will allow landlords to rent their property through ANAH – the Agence Nationale de l’Habitation – and in doing so increase their tax-free earnings: 15% to 85% of rental income accrued from the property.
ANAH will charge lower rents than the landlord would on the open market, but an association with them will reduce the landlord’s tax burden, hand over management hassle, and give them peace of mind that the property is going to those who most need it.
This is not a new scheme, having first been brought in in 2003 and reformed in 2006. However, the 85% level will be the most generous allowance seen yet. It is estimated that this measure will help bring 50,000 properties onto the market over the next three years, providing housing for around 115,000 people.
Other important announcements in the budget include €500 million for housing construction and €3 billion in loans for landlords to renovate and refurbish property to put on the market. ANAH’s budget will also be increased to unprecedented levels; up to €845 million to be put towards improving living conditions in 100,000 properties, 30,000 of which are in co-ownership agreements that need financial support.
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