It should be noted that since July 1, 2019, to cap rents in Paris has been put in place. The latter was introduced by the Élan law, allowing to combat the rise in rents in the French capital. Initially planned for a period of five years, it is a data to be taken into consideration imperatively for landlords.
Definition of rent control in Paris
As its name indicates, a rent control defines a specific framework for rent increases in the French capital. It is therefore forbidden to increase rents as you wish according to the zones of the metropolis. Moreover, these are called tense zones to allow all classes to access housing more easily, without facing abusive pricing.
By definition, a tense zone only concerns a geographical area in which rents are particularly high. There is a sort of imbalance between supply and demand. Moreover, rent control does not only concern the French capital, other agglomerations are also concerned such as Lyon, Lille, Marseille, Nantes or Toulouse.
To find out more, don't hesitate to consult the interactive map on the referidf website.
Which properties are directly involved in the rent control in Paris?
From the moment the lease has been signed from July 1, 2019, you are necessarily concerned by the rent control. Therefore, the rent will be set according to the following double limit:
First, the rent that was applied for the previous tenant. This is a principle that must be respected when the property belongs to a tense area.
Then, you find the increased reference rent. This is established per square meter of living space and of course per month. It is calculated directly by prefectural decree.
In these conditions, when it is a first rental or a lease renewal, it is imperative that the tenant's rent is not higher than the increased reference rent. In the case of a re-rental, the new tenant will benefit from exactly the same rent as the former tenant, unless the increased reference rent has been modified in the meantime.
As you can see, it is imperative to take this information into consideration in order to know how to rent your property.
How to take into consideration the increased reference rent ?
To estimate your rental income, it is impossible to ignore the increased reference rents. It is important to know that the references are established in a precise manner, not according to the Parisian districts, but in relation to specific neighborhoods. For this purpose, a set of criteria is taken into consideration and each year a prefectoral decree determines the reference value. The latest one was published on June 2, 2022.
In other words, it is a reference to be taken into consideration immediately if you have signed a lease since January 1, 2022 and the same reference criterion will be considered until June 30, 2023.
If you are wondering what the increased reference rent is for your property, you need to know in which district it is located. Then, you must visit the interactive map that has been made available to you by the Île-de-France prefecture. Please note that it is necessary to know the increased reference rent before signing any lease.
For example, in the Paris area, the prefecture has divided the area into 80 distinct districts. Each district has its own reference in terms of square meters per month.
A complete overview of the criteria taken into account by the prefecture
To find out the expected return on investment, look at the district in which you wish to invest. In addition, you must take into consideration the technical characteristics of the property, regardless of the number of bathrooms, kitchens and corridors.
First of all, look for the years of construction, because the increased reference rent will not be the same if the building was built before 1946, between 1946 and 1970, between 1971 and 1990 or after the 90s.
As you can also imagine, the type of tenancy is of considerable importance. The increased reference rent will not be the same in an empty rental or in a furnished rental. Generally, you can expect three to five euros more per square meter of living space if you opt for a furnished rental.
How do you determine the monthly rent for a property in Paris?
Rest assured, the calculation is extremely simple as long as you know the monthly reference rent. This is indicated for each square meter and per month. So you need to use this information as a basis and know the living area of your property.
For example, you have invested in a 50 m² apartment of type T2. It was built before 1946 and your investment was made in the Necker district. Therefore, if you establish a lease between July 1, 2022 and June 30, 2023, you will have to take into account the increased rent of your district.
If you are considering a furnished rental, the increased reference rent will be €36.40 per square meter per month. This allows you to expect an income of 1820 euros.
If, on the other hand, you are renting empty, the increased reference rent is €32.30 per square meter per month. Therefore, your maximum rent cannot exceed 1615 euros.
As you have just seen, it is impossible to exceed a specific rent amount. But the reference income does not take into account the charges. In addition to the reference rent, you can perfectly well add the amount of the rental charges.
How to get around the rent regulation ?
Now that you have made the calculation in relation to the increased reference rent, it is impossible to exceed this limit. However, you may be granted a rent supplement if your property has exceptional characteristics. In this context, you can ask for a higher rent, although there are no precise elements on this subject.
In other words, each property must be considered on a case-by-case basis. If there is a problem with the tenant, the conciliation board will decide in your favor or not.
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