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Buying confused

If you’re looking to buy to rent your second home in Nice but worried about the implications of new laws on seasonal lettings don’t fear! We have all the information you need right here. Although new laws are geared to regulate seasonal lettings of second homes for non-residents, buying to rent is remains a viable means of achieving a substantial return on your property investment.

The Loi Alur (Accès au logement et urbanisme rénové) was passed on 20 February 2014 with the aim to restrict landlord-tenant relations. It covers many aspects of housing law including short term holiday renting and seasonal lettings. Towns and cities with more than 200,000 inhabitants, i.e. Nice, require second-home owners to register their property with the Mairie to valid their right to rent out a property to tourists, in the interest of remedying the housing shortage in France.

As a member of the FNAIM we receive regular updates about the law and follow the necessary steps to keep all our clients aware of. However, typical of the sluggish pace in French bureaucracy, several sections of the law are not scheduled to come into effect until January, 2016 or later.

Summary of the law thus far

At the end of 2014 we were sent a summary of the developments of the law, taken from the minutes of a meeting held by the Bureau Métropolitain de Nice.

The pertinent points for second-home owners intending to rent were:

  • One owner cannot be granted permission to rent more than three properties;
  • The permission to rent will last a total of six years (three periods of two years each);
  • Permission to rent will only going to be given to 50% of properties available;
  • No guidance was given on how to apply for permission, or what happens after the six years are elapsed

We were assured by FNAIM that if the situation changes, we will be the first to know, and that of course, property owners who can show they are working with a legally registered agency with a Carte Professionelle, properly collecting the tax de séjour, paying their respective taxes are going to be first in the queue if the Mairie ever decides to process applications and follow the Loi Alur.

Political context and public opinion

The Loi ALUR has been heavily criticised throughout France for its stunted development and poor execution. When left-wing Housing Minister Cecile Duflot passed the law it was publicly condemned and regarded as socialist in the extreme. This has wider implications for President Francois Hollande’s government as a whole.

Socialist policy has been under fire in France throughout Hollande’s term. Most notably the implementation (and speedy removal) of the 75% Super Tax. There is relatively strong feeling in many parts of France that the actions of Hollande and the Socialist Party will swing popularity towards a right wing President at the next election. Im the event of a UMP Presidency many see the potential for the law to be reversed.

Our thoughts on the law

We must stress that this law does not worry us. There are clearly waters to navigate, as with a lot of French bureaucracy, but as this law shapes over the years ahead, it may even become something that will work to our advantage.

The law seems to be in part, a strategy for gathering taxes (tax de séjour) and to stop the large underground market of holiday rentals; be that owners not declaring taxes, unregistered agencies avoiding taxes (including prominent agents such as Airbnb), and holiday makers not being charged the tourist tax.

As these practices are fought by the fiscal bodies in France, competition will become significantly reduced. Do-it-yourself property owners will either be forced to sell or raise their prices in an effort to cover the costs of the various taxes and fines will have to pay. Clandestine agencies will also be forced to pay the relevant taxes or be closed down.

Nice Pebbles has always adhered to all legal requirements and payed the appropriate taxes. We have long been committed to helping our owners ensure they do the same, in order to protect, and deliver the greatest return possible on their investment.

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