How will MP Le Meur finish off real estate in France?

Annaïg Le Meur's project is clear: to align the taxation of furnished rentals with that of unfurnished rentals. In other words, she wants to silence the advantageous tax regimes that have allowed furnished rentals to flourish, to the benefit of investors and tenants. Currently, the average profitability of furnished properties is around 3%, while that of unfurnished rental properties stagnates at around 1,5%. This difference is crucial to attract investors in a market where overall profitability is already low.

The picture that the Member of Parliament has presented is worrying. By removing tax benefits for furnished rentals, she claims to be redistributing taxation, but in reality, she is jeopardizing the entire real estate market. Such a reform could plunge thousands of owners and investors into financial turmoil, and weaken the construction sector, which is already at a standstill in France. Hundreds of thousands of jobs are at stake.

Worse still, Gabriel Attal has given his support to this proposal. In defending the idea that the LMNP (Non-Professional Furnished Rental) is a "tax loophole" to be reduced, he is seriously mistaken. The LMNP is not a tax loophole, it is a regime that meets a real and essential need in our rental economy. By reducing this regime, we are jeopardizing an entire economic balance.

The already suffering real estate market does not need this new sword of Damocles. Annaïg Le Meur's proposals are not only devastating, but they demonstrate a total misunderstanding of the issues at stake in the real estate sector. If this law passes, we will no longer speak of a crisis, but of a systemic decline. Investors will flee, real estate projects will be frozen, and the impact on employment will be catastrophic.

The worst part is that this reform ignores a fundamental truth: the profitability of risk-free investments, such as cash, is currently around 3%. For real estate to remain competitive, it must offer at least similar profitability. This is more or less the case for furnished rentals, but absolutely not for unfurnished rentals. If we want to make real estate attractive and propose a reform that truly supports the sector, it would be more relevant to align the taxation of unfurnished rentals with that of furnished rentals, rather than the other way around.

In conclusion, far from being a simple tax revision, Annaïg Le Meur's proposal could well signal the end of the real estate market as we know it. We must firmly oppose this reform which threatens to do more harm than good.

Tribune by Roy Masliah, Founder of decla.fr (LinkedIn).