How Does Paris's Rent Ceiling Work?
It's important to know that?rents in Paris have been capped?since July 1, 2019. The latter was made possible by the élan law, which was meant to stop rents from going up in the French capital. Originally meant to last for five years, it is important information for landlords to take into account.
What rent control means in Paris
As its name suggests, rent control sets limits
A "tense zone" is only an area where rents are very high, according to its definition. There is a difference between what people want and what they can get. Also, rent control doesn't just affect the French capital. It also affects cities like Lyon, Lille, Marseille, Nantes, or Toulouse.
Which homes in Paris are directly affected by the rent control?
From the moment you sign the lease until July 1, 2019, you have to worry about the rent control. So, the following double limits will be used to set the rent:
? First, the rent that was paid by the last person who lived there. This is a rule that must be followed if the property is in a dangerous area.?
? Find the reference rent that has gone up. This is set per square meter of living space and, of course, per month. It is directly calculated by a prefectural order.
When a tenant moves in for the first time or when the lease is renewed
As you can see, you need to think about all of this information if you want to know how to?rent out your property.
How to take into account the fact that the reference rent has gone up?
It is impossible to?estimate your rental income?without taking into account the fact that reference rents have gone up. It's important to know that the references are made in a very specific way, not based on the districts of Paris but on specific neighborhoods. In order to do this, a set of criteria are looked at, and each year, the reference value is set by a prefectural decree. The one that came out most recently was on June 2, 2022.
In other words, it is a reference that needs to be taken into account right away if you signed a lease after January 1, 2022. The same reference criteria will be used until June 30, 2023.
The reference price changes every year
If you want to know what your property's increased reference rent is, you need to know where it is in the city. Then you need to go to the interactive map that the ?le-de-France prefecture has made available to you. Please keep in mind that you need to know the new reference rent before you sign a lease.
For example, the prefecture has split the area around Paris into 80 separate districts. In terms of square meters per month, each district has its own reference.
A full list of all of the factors that the prefecture looks at
Look at the area where you want to invest to find out?what kind of return you can expect. You also need to think about the property's technical features
First, look at when the building was built. If it was built before 1946, between 1946 and 1970, between 1971 and 1990, or after the 1990s, the increased reference rent will be different.
As you might also guess, the type of tenancy is very important. The increased reference rent will be different in a place that is empty and in a place that is full of furniture. Usually, a furnished rental will cost you three to five euros more per square meter of living space.
How do you figure out how much a Paris apartment costs per month?
Don't worry, figuring it out is very easy
For example, say you bought a type T2 50 m2 apartment. It was built before 1946, and you put your money into it in the Necker neighborhood. So, if you sign a lease between July 1, 2022 and June 30, 2023, you will have to consider the higher rent in your area.
If you want to rent a place that is already furnished, the new reference rent will be €36.40 per square meter per month. This means that you can expect to make 1820 euros.
If you are renting an empty space, on the other hand, the increased reference rent is €32.30 per square meter per month. So, your rent can't be higher than 1615 euros.
As you've just seen, you can't pay more than a certain amount of rent. But the charges are not taken into account in the reference income. You can add the amount of rent to the reference rent.
Are there any exceptions or ways around this law?
Since you've already done the math based on the higher reference rent, you can't go over this limit. But if your property has special features, you may be able to get an extra rent payment. In this situation, you can ask for a higher rent, but there aren't any clear rules about it.
In other words, each property needs to be looked at on its own. If there is a problem with the tenant, the conciliation board will decide if you win or not.
Why hire a specialized agency to take care of your rental property?
UpperKey?is the place to go if you want to save money, feel safe, and have a reliable partner. We'll help you figure out how much rent to charge and how much money you can get. A specialized company can help you figure out how to do the right calculations.
You will also have a strong shoulder to lean on when it comes to different technical and administrative issues. For example, you have certain questions about vacation rentals and?Airbnb taxes.
If you need a tax adjustment, don't try to figure it out on your own. Instead, let knowledgeable people guide you and give you the best help they can.