Airbnb Trends, Property Tax Increase: Five Updates From French Real Estate

By Judy J. Beasley Last updated Feb 2, 2023

The average price of an Airbnb in France is 142€/night

Data from holiday rental platforms in Europe confirmed 2022 as a buoyant year for tourism, including in France – even if travelers’ tastes in real estate are changing.

All but one country – the UK – saw an increase in occupancy compared to 2021, with Hungary, Portugal and Norway recording the strongest growth.

France ranked 15th, with vacationers booking a total of 86 million nights on Airbnb and Abritel, another popular vacation rental platform, last year.

The average price per night in France was €142, 26% more than in 2019 but 13% less than in 2021.

The statistics, from the specialized research group AirDNA and reported by BFM, showed a preference for smaller properties, such as apartments, over houses or villas. Shared rooms have been particularly popular, with an increase in bookings of around 18.4% last year.

He also found that while occupancy increased at all price points, it was higher for budget and economy ranges.

“This suggests that travelers are increasingly looking for more affordable options in the European short-term rental market, and those booking luxury rentals may travel further,” AirDNA said.

Airbnb and similar platforms have come under regular criticism in French tourist hotspots, where residents accuse it of pushing local property prices beyond affordable levels and creating ghost towns of second homes for rent .

Life annuity purchase: the court rules on the seller’s illness

A peculiarity of the French real estate market is the strong trade in in life purchases, where you buy a house but the seller continues to live in it until they die, receiving a lump sum and a monthly payment, called rent, while they do so.

A life Selling basically means betting on the life expectancy of the previous owner: how much you pay depends on how long they live.

If the seller dies within 20 days, his heirs can request the cancellation of the sale but not, a court ruled in January, if this deadline is exceeded – even if the seller was sick when the contract was signed.

In this case, the heirs had argued that the buyer, a relative of the deceased, was aware of his compromised state of health, which required permanent medical treatment.

By paying a lump sum of around one-fifth of the property’s value, the seller had to be confident they were getting a good deal, they said.

It would have taken 13 years of “rent” payments for the price paid to match the full value, the heirs argue.

Instead, the seller died three months later, but France’s highest court, the Cour de Cassation, insisted on January 18 that this was not grounds to cancel the sale.

The judges pointed out that the saleswoman’s underlying medical condition had not been established as short-term life limiting – and that indeed she died from a fall rather than the consequences of the disease.

They also wondered about the confidence the seller could have had in his medical prognosis, given that he was not a doctor.

Life annuity cases are often before the French courts. In December, we reported that a sale was canceled in Montpellier after a real estate agent took advantage of a pensioner to buy her apartment for half the price it was worth.

And in May, a firefighter was tried for the alleged murder of a 92-year-old woman whose property he owned. life contract on.

Grenoble residents are preparing for a sharp increase in property tax

After weeks of speculation, the city of Grenoble confirmed last week (January 27) that it would increase the communal share of its property tax by 25% this year – in addition to a 7% hike in the base rate at the National level.

Property tax (property tax) the invoices are recalculated each year according to the amount at which the property could theoretically be rented out – this is its cadastral rental value (VLC), and an annual increase (this year of 7%) is applied to VLC according to the consumer price index.

To obtain the tax account, the VLC is divided by two, to take into account expenses such as maintenance, insurance and repairs, then it is subject to a percentage which can be adjusted upwards or downwards. decrease by decision of the town hall and/or intermunicipal bodies.

It is this municipal percentage which should increase by 25% in Grenoble.

The authorities say that it is justified to finance projects that will accelerate the ecological transition.

“We have already done this by reducing the need for energy by 40% thanks to investments”, Vincent Fristot, deputy mayor in charge of finance, told France Info.

“We must continue in this direction, greening the city, because the summers to come will be even hotter.”

Critics argue, however, that the need for an “ecological transition” was identified around eight years ago, with nothing being done, and that the rise could not come at a worse time for Grenoble residents as the crisis in the cost of living continues to be felt.

In a press release, the municipal opposition group Nasa (Nouvel Air, socialists and relatives) declared that it risked “fragilizing many modest Grenoble residents, retirees with modest pensions, and also those of the middle classes”.

To compensate for the tax increases, the Grenoble authorities have announced aid for the less well-off owners.

It is estimated that the increase will yield some 44 million euros in additional funds, part of which will be used to make entry free of charge to the city’s three main museums.

Property tax increased by 4.7% on average in the 200 largest cities in France in 2022, and Paris has already announced further increases in 2023.

The usufruct rights end on the death of the donor

France’s highest court has convicted a man who tried to prevent his siblings from claiming any benefit from their mother’s estate when she died.

The man, who has not been identified, received usufruct – the right to enjoy and derive income from property without owning it – by his mother during his lifetime.

On his death, he considered that this right was part of his estate, but the Court of Cassation decided otherwise in January.

A parent can give their child usufruct of a property, the judges said, but that ceases upon the death of the parent (the donor) – not that of the beneficiary.

At that time, the usufruct must be shared between brothers and sisters or co-heirs, reports BFM.

The court said it supported their claim for compensation from the time they all became equal beneficiaries of the property, ie. since the death of their mother.

Splitting the ownership of a French property into usufruct (actually a life interest) and bare ownership (residual property) is relatively common in French estate planning.

In these cases, it is the parent who has the usufruct – by keeping a life interest, they can continue to live in their home.

Upon their death, the person who owns the bare ownership becomes the absolute owner.

The tax to be paid by the beneficiary when receiving a gift of bare ownership is lower than if he subsequently inherits the same property, because the value of the gift takes into account the fact that the beneficiary has not all rights to the property.

Apartment owner cannot remove tenant for grandson to move in

The tenant of a Parisian apartment has won his fight not to be evicted to make room for his landlady’s grandson.

The landlady, who has not been named, gave her tenant notice to leave the property in July 2021, on the grounds that her grandson wanted to move to town for an internship.

In March 2022, when the tenant refused to surrender, she asked the Paris court for an eviction notice, reports Le Figaro.

However, the tenant, who had rented the property for six years, argued that the decision to repossess was not sufficiently reasoned.

He demanded from the landlady that she prove that her grandson, then a student in Troyes, had a valid reason for moving to Paris, such as an internship agreement or a job offer.

The case was settled in December but was only picked up by the media last month (January 18) when it was shared on Twitter by a representative of the Abbé Pierre Foundation, which works for people’s access disadvantaged to decent housing.

1/2 Studying in Troyes is not enough to motivate a leave to resume in Paris! A tenant of a maid’s room in Paris addresses the Foundation @Abbe_Pierre because his lessor wishes to take over the accommodation for his grandson. The judge just ruled otherwise…

— Eric Constantin (@EriConstantin) January 18, 2023

The court ruled in favor of the tenant, considering that the presentation of a certificate from the grandson’s university in Troyes and a description of his engineering course did not satisfactorily explain why he had to move to Paris.

He also noted that there had been no testimony from the grandson confirming his desire to move.

As such, the court ruled that a non-renewal of the lease was not justified and declared the notice to vacate the premises null and void.

The same tenant had previously obtained a rent reduction from his landlady after discovering a discrepancy of more than 5m² between the area indicated on the lease and the actual area of the property.

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