Property owners make proposals on private rental stock to improve the future of housing

The main idea that fueled the thinking and founded the new system revolves around encouraging landlords to behave as responsible citizens through individual actions geared towards satisfying the general interest.

Two systems have thus been created to take into account the different realities of each of the housing stakeholders: the "Universal Tax System for Rental Income" mentioned above, supplemented by the "Status of Intermediate Territorial Real Estate Companies". They are set out in a Report which was submitted to Minister Valérie LETARD.

Private rental housing: a central pillar of housing

In 2023, France had[2] 36,8 million homes, broken down as follows: 55% individual houses and 45% apartments[3].

The private rental sector houses 23% of households compared to 18% in the social sector[4]. This sector is based on 5,09 million landlords, 76% of whom are individuals. It therefore weighs heavily on the national economy with, for example, €60 billion in gross annual rents, and €42,6 billion declared.

By contrast, there are two types of lessors, the second of which is generally ignored even though its role is essential in the territories: the private lessor who is an economic agent and the managers of intermediary land companies in the territories who are entrepreneurs.

Changing perspective: recognizing the lessor as an economic actor

The report calls for landlords to be considered as providers of housing services, with rents recorded as such in housing accounts. This recognition aims to maintain and increase a high-quality private housing stock across all regions, capable of housing 30% of our citizens within ten years.

Two concrete proposals

A universal tax system for rental income

• Simple: inspired by existing mechanisms or those that have already existed in Europe, without disrupting the general principles of taxation of property income;
• Neutral: valid for both old and new items, throughout the country;
• Universal: open to both unfurnished and furnished rental, including in the event of inheritance or donation, or as an option for existing properties.

The principles of this device in brief:

• Depreciation of 80% of the value of the property: 2%/year for 40 years (NB value of residential rental assets: €1.680 billion);
• Depreciation of major works over 20 years: 5% per year;
• Reintegration into the cost price of depreciation after 10 years of rental;
• Deduction of current expenses and expenses for small maintenance;
• Interest deduction;
• Carryover of the deficit on current income without limit;
• Cost to the State for a fully loaded universal system 500 million less than the current cost of tax incentive schemes. (Processing of works allowing for the elimination of deficits);
• Removal of aid for lessors benefiting from the system;
• Gain for lessors: 0,8 to 1% additional return.

A status for intermediary real estate companies in the territories

The system is intended to be applied to Directors of Intermediate Territorial Property Companies (DFIT) who are part of a genuine entrepreneurial approach and characterized by legal, financial and professional criteria.

Criteria:

• Legal (Real estate assets and corporate tax);
• Financial (turnover equal to or greater than €1.500.000; 75% of assets made up of real estate and in Europe; Obligation to allocate 30% of the result to a real estate investment reserve);
• Main activity of the corporate officer with training commitment;
• Three-year CSR commitment;
• The manager is exempt from IFI up to the amount of his participation in a FIT and the company is eligible for the DUTREIL pact.

[1] This working group is composed of Sylvain GRATALOUP, President of UNPI France; Bruno BROSSET, Administrator of UNPI France; Hugues MARTIN, tax lawyer FIDUCIAL UNPI 69 & Métropole de Lyon and Jean-Marc TORROLLION, Administrator of UNPI 69 & Métropole de Lyon.

[2] Source INSEE/SDES)

[3] Housing account 2023 (2022 income): Curiously, the housing accounts show different figures from those of INSEE: 38,1 million dwellings, including 31,242 million main residences; 7.773 million rental dwellings; 24,9% of households in the private rental sector.

[4] Housing account 2023, see above.

Illustrative image of the article via Depositphotos.com.