The struggle faced by François Bayrou in the realm of real estate

France's housing minister, Valerie Létard, has convened with private rental sector stakeholders with the aim of rejuvenating the country's dwindling real estate investment and finding an effective remedy to address the weakening housing market. The impending 2026 Finance Bill includes a proposed fiscal status for private landlords, a move that the minister has expressed the need to advocate for with policymakers at Matignon, Bercy, and local government bodies.

However, securing this victory in the current financial climate, which requires immediate budget savings of 40 billion euros, may prove challenging. The minister's intended measures come at a time when the successive interest rate reductions by the European Central Bank indicate a steady rise in housing costs, with prospective buyers being priced out by inflation, and long-term financing becoming increasingly expensive.

The deteriorating housing market has significant consequences. Accession and first-time accession are in decline, with reports on the rental market falling short of satisfactory. Long waiting lists for private rental housing are growing, especially in major cities and competitive medium-sized cities, obstructing professional mobility, employment opportunities, and the growth of service industries nationwide. The high costs and shortage of housing are also hindering the competitiveness of France, exacerbated by factors such as the lack of accommodations for university students in popular cities.

Recent trends show that real estate investments in new buildings have decreased significantly over the past two years, with a third reduction in older properties. The resulting loss in fiscal revenues, in terms of reduced Value-Added Tax (VAT) and transfer duties for departments, highlights the importance of addressing this situation by providing fair tax considerations for private rental investors. This would help to restore fiscal revenues relatively quickly while preserving and creating local jobs.

The proposed fiscal status for private landlords involves the introduction of a 20-year depreciation regime for assets, amounting to 80% of the asset value, and a reintegration of depreciation in the calculation of capital gains. The rate may reach 4% per year, increasing to 5% in the case of intermediate rent. New and old properties are set to be included, primarily for new investments. The proposal has received broad support from real estate sector professionals, though specifics will need to be discussed with policymakers to ensure its practical implementation and overall success.

Ultimately, the approval of the proposed status and its impact on France's housing market will depend on the delicate balance to be struck by Prime Minister François Bayrou. The repercussions of failing to address the rental offer have the potential to be significant and detrimental to the nation. The increased optimism in the sector at the prospect of this new fiscal status for private landlords makes it likely that the initiative will become a reality.

The housing market in France is coupled with the realm of finance, as the government seeks to revitalize real estate investment and address its weakness through political means, such as advocating for a special fiscal status for private landlords in the 2026 Finance Bill.
In the face of a challenging financial climate that necessitates immediate budget savings, the minister's proposed measures for the housing sector take on greater importance, as they aim to stem the tide of declining real estate investing and housing market deterioration.
Policy changes in the real estate sector, including the proposed 20-year depreciation regime for assets, have the power to influence general-news headlines, as they could potentially alleviate the high costs and shortage of housing, boost employment opportunities, and contribute to the growth of service industries across France.