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France Abandons Rent Controls And Creates New Tax Breaks For Btlers

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Just 18 months after their introduction the French socialist government has abandonned its flagship rent control laws for all towns with the exception of Paris where they will be kept "provisionally". "Job done" according to President Hollande but the laws have been blamed by many in the housing sector as well as the French Prime Minister with killing the market for investment properties. In a rare move the housing law, named after former Green minister Cecile Duflot, has been renamed. Valls apparently wanted Duflot to be airbrushed from history.

BTL investors will get some more breaks, they can let to relatives, parents or kids and have a choice of rental periods.

No news on a measure to limit agents fees for rentals which start from at least a months rental (1500 euros for a typical 1 bed flat in Paris).

http://tempsreel.nouvelobs.com/topnews/20140829.AFP4817/terrains-a-batir-abattement-fiscal-de-30-sur-les-plus-values-de-cession.html

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BTL investors will get some more breaks, they can let to relatives, parents or kids and have a choice of rental periods.

No news on a measure to limit agents fees for rentals which start from at least a months rental (1500 euros for a typical 1 bed flat in Paris).

http://tempsreel.nouvelobs.com/topnews/20140829.AFP4817/terrains-a-batir-abattement-fiscal-de-30-sur-les-plus-values-de-cession.html

Let them buy, even with whatever tax breaks, if they think the 'non-austerity' economic situation in France is working out, and they don't fear prices sliding to new lows, confident in international demand remaining robust at a certain price level. Same for London... let's see them up the rents... after all, if landlord's cost go up, many a UK landlord will tell you, that cost gets passed to tenant who must pay.

Paris property buyers bank on Hollande defeat

August 20, 2014

... London is far too expensive at twice the cost of Paris, Switzerland is lovely but boring, and Paris still remains one of the best places to invest as all wealthy people aspire to have an apartment in Paris.”

Despite Paris being one of the key real estate and economic centres of the world, prices are currently the lowest they have been for several years in the 8th, 16th and 17th arrondissements, Home Hunts data suggests.

... * ​For the first time, France is set to have an up-to-date property index.

The LPI (Les Prix de l’Immobilier) index, which is set to be launched in September, will be fed weekly by new transactions from a variety of different sources, market specialist, Athena Advisors, reports.

“The French Notaires have had a monopoly on house price data for a long time and when reports are published they are always six months behind,” says Nicholas Leach, from Athena Advisors.

“Historical data is always useful but the lack of real-time market information has always been a frustration for non-resident buyers, especially when this type of information is so readily available in countries like the UK. This new index will be extremely helpful when dealing with foreign investors, especially if it’s their first purchase in the country.”

http://www.opp-connect.com/20/08/2014/paris-property-buyers-bank-on-hollande-defeat/

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Nice to see estate agents know how to charge fees across the globe. For paying an additional 1 months rent what does the person renting get as service?

18 months and he's fixed the problem, an impressive policy.

Good to see that the future for the global economy is BTL, it's a business model that cannot possible fail.

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Nice to see estate agents know how to charge fees across the globe. For paying an additional 1 months rent what does the person renting get as service?

18 months and he's fixed the problem, an impressive policy.

Good to see that the future for the global economy is BTL, it's a business model that cannot possible fail.

I thnk the French govt. has seen the UK example and as they can't do anything much about exchange and interest rates and are constrained by the ECB wrt to the deficit they see BTL as the way to kick start the economy. 300,000 houses were built last year - and quite a few are empty and unsold.

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I thnk the French govt. has seen the UK example and as they can't do anything much about exchange and interest rates and are constrained by the ECB wrt to the deficit they see BTL as the way to kick start the economy. 300,000 houses were built last year - and quite a few are empty and unsold.

Indeed, In fact, I'm surprised it's taken this long as I expect many governments will copy the UK and aim to "boost" their economies by encouraging BTL. I thought Spain would be first though, seeing as they have a conservative government, but not surprised to see the champagne socialists of France lead the way, the same way our own champagne socialists lead the way with student fees and bailing out the banks.

Edited by mikthe20

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So rent caps caused a house price crash because they ended BTL speculation?

I'm confused. What's not to like?

No rent caps caused a building "crash" which meant house prices held up in the rent capped cities.

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Why is it a bad thing to build 300,000 homes a year?

That's nearly 3 x UK's insanely low level.

Whatever the French are doing, UK needs to copy.

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Why is it a bad thing to build 300,000 homes a year?

That's nearly 3 x UK's insanely low level.

Whatever the French are doing, UK needs to copy.

It is a lot, but not enough as the building industry has capacity for 500,000 home/year. You wonder who is going to live in them all mind.

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Why is it a bad thing to build 300,000 homes a year?

That's nearly 3 x UK's insanely low level.

Whatever the French are doing, UK needs to copy.

Too many of the current newbuilds get bought by investors, such as this one in Cambridge - and even the Rightmove for the development advertises it as great for investors/landlords. They've slapped on HTB stickers for non-landlords, to pay what it is worth.

http://www.dailymail.co.uk/money/mortgageshome/article-2586872/I-got-buy-let-investing-right-second-time-Landlords-best-rates-home-loans.html

I'm not competiting with landlords, who I want to see get a margin call.

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No rent caps caused a building "crash" which meant house prices held up in the rent capped cities.

340000 homes built despite rent caps is hardly a collapse. Certainly down (about 14% I believe) but nearly 500000 permits were issued.

Mighty impressive that.

The problem over here is the lack of permits.

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