Real Estate: Will Taxation on Fictitious Rent Be Reinstated?

Through a statement by Guillaume Kasbarian, the minister in charge of housing, the government sought to reassure concerned property owners. He stated that taxing “fictitious” rent was not being considered and would not be implemented.

The idea of taxing homeowners who live in their own properties—based on the rent they would pay if they were tenants—periodically resurfaces. Recently, this concept came to the fore again following a study published in the INSEE journal. The study’s authors argue that the non-taxation of imputed rent should be treated as a subsidy, estimating the lost tax revenue for France at 11 billion euros.

"These remarks have cast a shadow of disgrace on an entire group of French people, who are almost being blamed for having made sacrifices over the years and decades to secure a home and financial security for the rest of their lives," said Jean-Baptiste Lemoyne, a senator from Yonne, who questioned the government about its future plans.

In his clear and unequivocal response, Guillaume Kasbarian sought to reassure the 18 million French citizens who own their primary residence. Taxing “fictitious” rent as income is not part of the government’s agenda. On the contrary, the Minister of Housing pointed out that the Prime Minister, in his general policy address, stated that “homeownership is both a deep aspiration of the French people and a useful form of savings to prepare for retirement.”