France To Curb 'Excessive' Rents

by Ulrika Lomas, Tax-News.com, Brussels

17 November 2011

The French National Assembly has recently adopted government plans to create a dissuasive tax on 'abusive' rent in France, within the framework of the country’s 2012 finance bill.

Expected to enter into force in France from January 1, 2012, the new tax would apply to homes with an area less than 13 square metres where the rent exceeds a threshold set by decree of EUR40 (USD54) per square metre.

The measure is intended to combat excessive rents in areas of the country where demand for rental property far exceeds supply, principally the Île-de-France region around Paris and the Côte d’Azur French Riviera region, and is designed to protect tenants on modest incomes, especially students.

French Secretary of State responsible for housing Benoist Apparu first announced plans to introduce a ‘dissuasive’ tax on unfairly high rents in France from January 1 at the end of September.

Noting that the average rental price per square metre in the French capital is estimated at EUR23, the ministry explained that around 50,000 apartments in France, predominantly located in Paris, would be affected by the initiative.

Recommended