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"Concrete ways to implement a real housing policy"

2023-07-21T09:30:15.936Z

Highlights: Bernard Monassier is an honorary notary and vice-president of the Cercle des fiscalistes. He says the Pinel and Duflot tax measures are a common-sense reform. But it is urgent that other sustainable reforms be undertaken to remedy the housing crisis, he says. The tax incentives introduced by governments of both the right and the left have been a windfall for many taxpayers and developers alike, he writes. The government seems to be content, in addition to these cost-saving measures, with ineffective measures, he adds.


FIGAROVOX/TRIBUNE - The government decided last June to put an end to the Pinel system. For Bernard Monassier, vice-president of the Cercle des fiscalistes, this common-sense measure is only the beginning, and it is urgent that other sustainable reforms be undertaken to remedy the...


Bernard Monassier is an honorary notary and vice-president of the Cercle des fiscalistes.

The government has announced the removal for the future, the Pinel and Duflot tax measures. This raises an outcry from many professionals of protest. However, this is a common-sense reform. These tax provisions, like the previous ones (Périssol, Denormandie, Cosse, Besson, Robien, Borloo, etc.) which have succeeded each other for nearly 40 years, have a significant budgetary cost, which is regularly denounced by the Court of Auditors, without any effectiveness on the real estate market. To finally respond to the housing crisis in France, other solutions must be considered without delay.

These tax incentives to acquire rental housing, introduced by governments of both the right and the left, are not without perverse effects. They have been a windfall for many taxpayers and developers alike. This has put a strain on the state's finances. Finally, the poorly housed are always more numerous and the production of housing is permanently insufficient.

" READ ALSO "Behind the housing crisis, a double territorial and generational divide"

It is time, while the budgetary trend is towards the elimination of tax loopholes and the real estate crisis is taking hold throughout the country, to finally put in place a real housing policy for the next 10 years. Unfortunately, the government seems to be content, in addition to these cost-saving measures, with ineffective measures.

To build at least 500,000 housing units per year, which seems to correspond to the needs of French society, you need building land. However, the sale of building land triggers a capital gains tax. Taxation that contributes to a land freeze. It should therefore be abolished over a relatively long period, such as 10 years. The incentive to put on the market a large number of building plots would contribute to lower their selling price, with the key to a stabilization or even a possible decrease in the prices of new housing.

The stabilization of new housing prices is indeed a necessity to allow a middle class in the process of impoverishment to find housing. For this, a simple legal revolution is to be suggested: create by law a usufruct for a renewable period of 99 years. A real estate investor could thus acquire only the usufruct. Bare ownership is carried out by communal or state bodies, or by land companies. In return, the bare owner could receive a rent from the usufructuary, of the order of 2% of the value of the bare ownership. This system would mechanically reduce the selling price of apartments by at least 25%.

To save rental investment undermined by the Climate and Resilience law and the tightening of credit conditions, other inexpensive and easy-to-execute provisions are possible.

Bernard Monassier

To put it simply, why not imagine a kind of perpetual construction lease for residential premises? The increase in vacant premises should also be combated by providing for taxation much higher than the current tax. Another avenue for reform is that, in the event of a professional transfer, it would be useful to ensure that, within five years of the acquisition, the transfer duties due for the first acquisition are deducted from the duties due for the new acquisition.

To save rental investment undermined by the Climate and Resilience law and the tightening of credit conditions, other inexpensive and easy-to-execute provisions are possible. The first option is to exempt all new housing from inheritance tax. A similar scheme, whose fiscal cost is spread over decades, proved its effectiveness from 1948 to 1976. When it was abolished, the housing crisis no longer existed. This provision was also put in place by a centre-left majority.

The second avenue of reform to attract investors concerns the tax regime of property income. The current legislation is complex, also favors tourist rentals and furnished rentals. Finally, it is confiscatory. Indeed, the marginal tax rate for property income can reach 62%. The thresholds between the different regimes need to be simplified and harmonised, and – why not? - to create a possibility of flat tax for income from real estate as well as a withholding tax, like certain foreign legislation.

Read alsoShould we replace the income tax by a "flat tax" of 15%?

Another source of market blockage is the legal regime governing residential leases: is it not time to think about a reform? The latter has indeed become too complex and too unbalanced in favor of the tenant. Without returning to the contractual freedom that existed more than 40 years ago, this lease regime should be rebalanced.

These measures require political will, a vision of tomorrow's society: faced with the looming housing crisis, there is an urgent need to act.

Source: lefigaro

All news articles on 2023-07-21

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