Embarking on the journey to acquire your dream property in Paris is a thrilling endeavor. Yet, amidst the allure of cobblestone streets and charming Parisian architecture, understanding the intricate legal and regulatory landscape is key.
Amidst these complexities, the Diagnostic de Performance Énergétique (DPE) and other diagnostics hold significance for you as a discerning buyer.
With this article, French DPE and its other companion diagnostics will be less of an enigma to you.
Understanding the French DPE and Other Diagnostics
The DPE, or Energy Performance Certificate, holds significant importance in the French property market. Stemming from environmental concerns, this certificate assesses a property's energy efficiency, giving it a rating from A (most efficient) to G (least efficient). F and G ratings are considered "passoires énergétiques" (thermal strainers).
Additionally, the certificate includes recommendations for improving the property's energy efficiency. Enhancing energy efficiency can be achieved through upgrading old windows, installing smart thermostats, and utilizing energy-efficient appliances.
Energy Efficiency Criteria and "Decent" Housing
The criteria for energy efficiency and the classification of "decent" housing have been updated over time. In metropolitan France, landlords are required to provide tenants with decent housing. To achieve this, the law stipulates increasingly demanding minimum levels of energy performance:
Starting from January 1, 2023, a property is considered "energy decent" if its estimated energy consumption, as determined by the Diagnostic de Performance Énergétique (DPE) and expressed in final energy, is less than 450 kWh/m²/year.
Starting from January 1, 2025, a property must have at least a class F energy efficiency rating in the DPE to be deemed "decent."
Starting from January 1, 2028, the minimum requirement increases to a class E energy efficiency rating in the DPE.
Starting from January 1, 2034, the minimum requirement further increases to a class D energy efficiency rating in the DPE.
These regulations encompass new lease agreements, as well as renewals and tacit extensions of existing contracts.
In addition to the DPE, there are several other diagnostics that buyers need to consider:
Termites and Pests: This diagnostic assesses the potential risk of wood-destroying pests, essential for older properties and specific regions with higher risks.
Lead: Mandatory for properties built before 1949, this diagnostic identifies potential lead hazards, particularly important if renovations are planned.
Asbestos: For properties constructed before 1997, an asbestos diagnostic ensures safety by detecting materials containing asbestos.
Gas and Electricity: Diagnostics for these installations verify safety and compliance, ensuring a secure living environment.
Natural and Technological Risks: Depending on location, diagnostics for risks like flooding or proximity to industrial sites.
Loi Carrez Measurement: The Loi Carrez pertains to the measurement of a property's living space and aims to provide accurate information about the actual usable area within a property. This measurement excludes non-habitable spaces such as staircases, balconies and ceiling height. The minimum ceiling height for Loi Carrez measurement is 1.80 meters (5'11 feet). This height has been defined to ensure that a person of average height can theoretically live comfortably in a property. Property listings must include Loi Carrez measurements.
By the way, 9m2 (96.87 ft2) is the minimum Loi Carrez size to rent out. Chambres de bonnes usually measure that size, with an access to shared facilities in the hallway.
Timing and Responsible Parties
Diagnostics play a pivotal role in the property purchasing process, and understanding when and by whom they should be conducted is essential:
Before Sale: French law mandates that sellers provide diagnostics to potential buyers BEFORE the sale. This empowers buyers with critical information about the property's condition and energy efficiency.
Buyer's Due Diligence: As a buyer, it is crucial to review these diagnostics. Your loyal buyer's agent will read, interpret the results and assess potential implications for your investment.
Rental Implications: If you are considering renting out your Parisian property, the DPE holds particular significance. For example, since January 1, 2018, properties with DPE ratings of F or G are ineligible for new rental contracts.
My Recommended Approach
With respect to DPE, my strategic property selection approach typically includes:
Opt for a DPE-D Rated Property: Selecting a property with a DPE rating of D streamlines rental without immediate renovation obligations, ensuring a seamless investment process;
Choose a DPE-E Rated Property and Execute Strategic Renovations: Purchasing a property with a DPE rating of E allows for strategic renovations, elevating it to a D rating. This approach promises long-term rental prospects and energy efficiency.
More generally, I usually advise new clients to first consult a tax expert to fully understand the tax implications of their purchase and potential renovation plans. France offers tax incentives and benefits for certain types of renovations, such as energy-efficient upgrades or historical property preservation. This proactive approach can help you make informed decisions that align with your financial goals and comply with French tax regulations. I can recommend a reputable French tax attorney with international expertise.
Happy property hunting, and may your French real estate journey be as smooth as a buttery croissant! 🥐🇫🇷
As always, do not hesitate to leave comments and ask questions...
A bientôt!
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