Press Review – December 2016

Here is my latest ”Press Review” where you’ll find a round-up of the best articles published (online and offline) over the past few weeks – with news on the real estate market and the furnished rental sector…

logo-express-votre-argent Real estate: where to invest in Paris?

The market has picked up in Paris! Lower interest rates and the certainty that you will always find a taker for your property are encouraging people to buy, and quickly! The strong disparities among the different arrondissements have remained notably stable. International buyers still have a strong appetite to invest in properties in the heart of Paris. […] Despite the increasing demands of buyers (in terms of views, light, floor standing, proximity to public transport, condition etc.), the center of Paris, which is always exceptionally popular, is prompting price rises by virtue of its status, wealth of attractions and location. This is the case in particular in these areas because competition between buyers is especially fierce . ”Private individuals looking for a primary residence find themselves competing against an increasingly international clientele of investors. This is causing prices to rise, especially for smaller properties”, says Mathias Ramsbott. […] Those looking to invest in seasonal rental properties are focussing on the central arrondissements, whilst those seeking a traditional form of rental are opting for the more outlying areas. ”These districts, such as the 19th, 10th, 20th and 15th, are usually more profitable investments as they are cheaper to buy”, explains Mathias Ramsbott, Sales Director for the real estate agency Lodgis.
Read the full article (available in French only)

Logo l'Agefi Actifs Furnished rental tenants are concerned by the ”Airbnb amendment”

The sense of concern stems from a legal amendment added to the bill for the Social Security and Finance Act 2017 (PLESS). This amendment means that private individuals wishing to rent their furnished properties will from now on have to identify as self-employed if their rental income exceeds 23,000 euros per annum, the threshold that is already in place for for professional furnished rental services. Joining the French social security scheme for independent traders (RSI) and paying tax contributions would therefore become mandatory. […] But this would mean taxing landlords who have their properties managed by professionals and who are already subject to social security and social debt contributions (CSG and CDRS). This equates to a form of double taxation that supports the competitive edge held by online rental platforms. ”The bill that was approved by the National Assembly doesn’t draw any distinction between landlords who rent their furnished properties via digital platforms and those who commission real estate professionals to manage this”, says Maud Velter, legal counsel at Lodgis, the Parisian real estate agency that specialises in furnished rentals.
There will be a large amount of lobbying to senators, who will examine the PLFSS in November. ”The act will have to clearly stipulate that landlords who entrust their properties to professionals are exempt from the social security scheme for independent traders (RSI)”, says Maud Velter.
Read the full article (available in French only)

Logo_LesEchos Furnished rentals: will you have to pay into the Social Security Scheme for independent traders (RSI)?

The Social Security and Finance Act (PLESS) for 2017 was approved on December 5th and adds a new category of income to the sharing economy of furnished rentals advertised via online platforms. Some landlords will now have to contribute to the French social security scheme for independent traders and freelancers. […]
However, the act does not mention the fate of landlords who have their rental properties managed by professional real estate companies. The exact wording of the bill suggests that they will be subject to new responsabilities. ”The bill that was approved by the National Assembly doesn’t draw any distinction between landlords who rent their furnished properties via online platforms and those who commission real estate professionals to manage them”, says Maud Velter, legal counsel at Lodgis, the Parisian real estate agency that specialises in furnished rentals. The National Real Estate Federation (FNAIM) questioned advisors to the Ministry of Budget on this subject. They confirmed that landlords entrusting the management of their properties to a professional will not be subject to the social security scheme. We look forward to this being publically announced”. According to Maud Velter, ”when landlords commission real estate professionals to manage their rental properties, the management work is already subject to security contributions. It would be inconsistent and unwarranted, therefore, to force these landlords to join the social security scheme (RSI) for independent traders”.
Read the full article (available in French only)

Logo Le Particulier The Housing/Lettings File: how to deal with the rent caps

The Rent Reference Index varies based on property rental type (furnished or unfurnished), the neighbourhood, the size of the property and when it was built. You can find all of the Rent Reference Indices on encadrementdesloyers.gouv.fr. It should be noted that the the total amounts for the Rent Reference and Rental Increase Reference must be indicated on the leasehold contract. As a landlord, you can impose additional charges (”un complément de loyer”) – meaning that, in practice, you can add up to 20% to the Reference Index, if the property has a particular location, extra features or added comforts that warrant doing so. ”In a furnished property, the range and quality of equipment can be taken into account, for example”, explains Maud Velter, legal counsel at the real estate agency Lodgis. In this instance, a reason for the additional charges must be explicitly indicated on the leasehold agreement.
You can access the full file in Le Particulier for December 2016.

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About me

Maud Velter
Maud Velter
Legal & practical advice for furnished rentals
Associate and Legal Director of Lodgis, furnished rentals and property law specialist

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