This is the result of a compromise between the left, center and right groups. Lawmakers voted Friday to create a tax system that encourages individuals to invest in affordable rental housing.
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.
Tax depreciation up to 5.5%.
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.
This is an “encouragement for private investment to produce sustainable and affordable housing”, said socialist Inaki Echaniz, in return for a “real commitment” from the government to review the levy on social landlords.
Since 2018, these areas have been subject to Solidarity Rent Reduction (RLS), a levy on their income that requires them to reduce rents for low-income households, without full compensation from the State, thereby reducing their capacity to build or renovate.
Rejection of LFI and Communists
In an effort to find a compromise, François Jolivet (Horizons) called on Public Accounts Minister Amélie de Montchalin “to listen” to the demands of the left in an “Assembly without an absolute majority”.
Ministers have committed to reducing the levy, without confirming for now the figure of 900 million euros requested by deputy environment chief Cyrielle Chatelain, versus 1.4 billion euros planned for 2026 according to the social landlords’ federation.
He mentioned the need to maintain a balanced budget.
Insufficient commitment for environmentalists who ultimately voted against, saying that they had the possibility to change their position on second reading in case of action on the part of the government.
The communist party and La France insoumise also rejected the move. “Continuous tax exemptions will benefit the richest group, the owners,” argued Claire Lejeune (LFI).
