The French government’s 2025 budget reflects a concerted effort to address the nation’s fiscal challenges while promoting housing accessibility and environmental sustainability. Key measures have been introduced that impact property ownership, rental income, and real estate transactions.

Stated Goals of the Housing Policy in the 2025 Budget

The primary objectives of France’s housing policy in the 2025 budget are to:

• Enhance Housing Affordability: Implement measures to make housing more accessible to a broader segment of the population.Stimulate the Real Estate Market: Encourage investment and activity within the property sector.
• Promote Energy Efficiency: Incentivize renovations that improve the energy performance of buildings.
  Here is a detailed analysis of these objectives:

Supporting Homeownership and Facilitating Access to Housing:

• Exemption for Donations: By exempting monetary donations for the purchase, construction, or renovation of housing from transfer duties, the government aims to encourage intergenerational wealth transfers and facilitate the acquisition of primary residences, particularly for young households1.
• Expanded PTZ: Extending the interest-free loan (PTZ) to the entire territory and to new homes aims to make homeownership more accessible, especially for first-time buyers.

Stimulating Rental Investment and Encouraging Responsible Investment:

Extension of the Loc’Avantages Scheme: By extending this scheme until 2027, the government incentivizes landlords to offer housing at moderate rents, thereby increasing the supply of affordable housing and combating housing insecurity.

Rebalancing Public Finances

Increasing Tax Revenue:

• Higher Transfer Duties: Allowing departments to increase transfer duties (DMTO) aims to boost local authorities’ tax revenues, compensating for revenue losses due to decreased property transactions in previous years24.
• Reform of LMNP Taxation: Removing the tax exemption for property depreciation in LMNP and including depreciation in the calculation of taxable capital gains aims to increase tax revenues by broadening the taxable base3.

Supporting Construction and Renovation

• Exemption for Construction Donations: Exempting donations for construction from transfer duties aims to stimulate new housing construction, thereby addressing the growing demand for housing1.

MaPrimeRénov’: Although the budget for MaPrimeRénov’ is reduced, maintaining this aid encourages energy renovation projects, contributing to the ecological transition and improving the existing housing stock.

Protecting Buyers and Investors:

• Maintaining LMNP Status for Service Residences: Excluding student residences, senior residences, and establishments offering services to the elderly or disabled from tax reforms aims to protect investors in these sectors, ensuring stability and security for existing investments.

Impact on Non-Resident Buyers – Attractiveness of the French Real Estate Market:

• Exemption for Family Donations: This measure makes buying property in France more attractive for non-residents by facilitating wealth transfers and supporting homeownership3.
• Adapting to New Costs: However, the increase in DMTO could be a deterrent for non-resident buyers, who will need to adjust their investment strategies accordingly1.

The Loi de Finance 2025 does not introduce any specific tax changes that directly target international buyers or investors in the French housing market. However, the general tax changes, such as the increase in transfer taxes in certain areas, could also apply to international buyers.