What's Changing on July 1 for Parisian Homeowners
Rent controls, energy performance certificates (DPE), rising gas prices, and changes to the MaPrimeRénov' program… an overview of the latest developments affecting Parisians.
Effective July 1, 2024, Parisian landlords will be required to comply with the new rent caps set by the Paris Prefecture. This measure, which covers 80 geographic areas, aims to regulate the rental market and prevent abuse.
Landlords may set a rent between the lower limit (30% below the median rent) and the upper limit (20% above the median rent). These limits, based on the median rent observed in the market, serve as a reference when drafting the lease. For existing leases, the rent reference index (IRL), which is indexed to inflation, remains the basis for the annual rent adjustment.
Failure to comply with rent control regulations is punishable by a fine of up to 5,000 euros for an individual and 15,000 euros for a legal entity. The tenant may also demand a refund of any overcharges. To find out the maximum allowed rent, landlords and tenants can visit the website of the Regional and Interdepartmental Directorate for Housing and Accommodation and enter the property’s details.
Energy Performance Certificate, Natural Gas, and Renovation
For homes with a floor area of 40 m² or less, the energy performance certificate (DPE) will change effective July 1. The method for calculating the energy label has been modified, allowing a number of smaller homes to no longer be classified as “energy-inefficient.”
As of July 1, 2024, the method for calculating the energy performance certificate (DPE) has been changed for homes smaller than 40 square meters in metropolitan France. This change could result in the energy label being revised for 140,000 homes.
The purpose of the Energy Performance Certificate (EPC) is to assess a home’s energy consumption and greenhouse gas emissions, assigning a letter rating ranging from “A” for the most energy-efficient homes to “G” for the least energy-efficient. However, the Ministry of Ecological Transition has found that small homes measuring less than 40 square meters are rated lower than average by the EPC.
This situation can be explained by the fact that, among the criteria used to determine the rating, domestic hot water consumption was calculated per square meter, even though hot water needs are similar for homes ranging from 20 to 30 square meters. This calculation bias led to 27% of properties smaller than 40 square meters being classified as energy-inefficient, which, according to government authorities, does not reflect reality.
To address this situation, a weighting factor is now applied to domestic hot water production for homes smaller than 40 square meters, without changing the overall method for calculating the energy performance certificate (EPC). The Ministry of Ecological Transition estimates that this adjustment should enable nearly 140,000 homes to move out of the “energy-inefficient” category (EPC categories F and G).
This change is important for many homeowners, as the Energy Performance Certificate (EPC) has become a key document in real estate transactions. Buyers scrutinize the EPC closely, using it as a bargaining chip to negotiate the purchase price of a property. If the property is rented out, the energy rating is crucial, as it determines whether it will have to be removed from the rental market according to a schedule aimed at gradually banning the rental of the most energy-inefficient properties.
If you own a property smaller than 40 square meters and have never had an Energy Performance Diagnosis (DPE) conducted, you can hire a professional to perform one, who will apply the new weighting criteria. If you had an EPC performed between July 1, 2021, and July 1, 2024, you can visit the ADEME website and enter the 13-digit number on your document to download a free certificate that will replace the first page of your original EPC. However, your new label may be the same as that of the original EPC—for reasons other than hot water consumption—or it may be better, but under no circumstances will it be worse.
Maprime Rénov’
Owners of homes rated F or G on the energy performance certificate (EPC) will no longer be eligible for MaPrimeRénov' if they carry out only one type of work. They must undertake a major renovation that includes at least two types of insulation work, the replacement of the heating system, and the installation of a mechanical ventilation system. These improvements must result in an improvement of at least two grades on the EPC.
Finally, gas bills are set to rise. The average price of gas will increase by 11.7% in July compared to June. This increase is due to a rebound in market prices and a rate hike by the distribution networks.
