Lawmakers voted on Friday, November 14, to create a tax system that encourages individuals to invest in affordable rental housing, which was the result of a compromise between left, center and right groups.
The measure was adopted by 158 votes to 49, in return for the government’s commitment to significantly reduce the levies imposed on social landlords, in response to leftist demands.
To try to respond to the housing crisis, they approved the creation of “private landlord status,” a tax benefit intended to encourage individuals to invest in housing to rent it, which has long been demanded by right-wing groups and orchestrated under the leadership of socialist and environmental groups.
This new status provides for tax depreciation of 3.5% per year for new medium rent housing, 4.5% for social housing and 5.5% for very social housing, up to 80% of the property value and 8,000 euros per year for a maximum of two housing units. For old buildings being renovated, the rates are set at 3%, 4% and 5%. Rentals must comply with approved housing ceilings and rentals to family members are excluded.
“Tax exemption that will benefit the richest people”
He “encouragement of private investment to produce sustainable and affordable housing”underlined (Socialist Party) Pyrénées-Atlantiques deputy Iñaki Echaniz, in reply “real commitment” government to review levies on social landlords.
Since 2018, these areas have been subject to solidarity rent reduction (RLS), a levy on their income that requires them to lower rents for low-income households, without full compensation from the State, thereby reducing their capacity to build or renovate.
In search of a compromise, deputy (Horizon) Indre François Jolivet named the minister responsible for public accounts, Amélie de Montchalin, “hear” leftist demands in a “Assembly without absolute majority”.
Ministers have committed to reducing the levy, without confirming for now the figure of 900 million euros requested by the president of the group of environmentalist deputies, Cyrielle Chatelain, against 1.4 billion euros planned for 2026 according to the federation of social landlords. He mentioned the need to maintain a balanced budget.
Insufficient commitment for the Ecologist who ultimately voted against, saying that they had the possibility to change their position at second reading if the government changed its position. The communist party and La France insoumise (LFI) also rejected the move. MP (LFI) for Essonne Claire Lejeune lashed out “fixed tax exemptions will benefit the richest group, namely owners”.
