News Digest: Is France Facing a Property Crisis Plus Taxes, Strikes & Water Shortages!

If you are resident in France or rent out your French second home, you have a legal responsibility to file an annual French tax return (even if you have no tax to pay!), and this week marks the final deadline for 2023. If you live inFrench départements 50-101 or French overseas territories, the deadline for submitting your online return is this Thursday, June 8^th. Residents of all other departements should already have filed their 2023 declarations, which concern income received in 2022.

If you still need to fill in your tax return, we’ve put together a series of handy guides to help you along the way, and you can check our 2023 French Tax Calendar for all the deadlines. And if you have missed the deadline, here’s what to do if you’ve missed the French tax return deadline.

There’s been a lot of talk in the French press recently about the “crise de l’immobilier” or “property crisis”, with experts drawing attention to the fall in housing construction rates alongside soaring mortgage rates and a nationwide drop in property sales.

Price estimator Meilleurs Agents have reported an average 0.9% reduction in property prices throughout France since the start of 2023, while monthly sales are down 15% over the last year, and the average time taken for a property sale to go through has increased by 10% since last year – a rise attributed to the difficulties in accessing credit.

Speaking of which, mortgage rates are at an all-time high, with the average rate being offered by banks in April 2023 at 3.30%. With the minimum lending rates in France unchanged, this reduction in the borrowing capacity (and therefore purchasing power) of French households is forcing many lower-income households out of the buying market.

The decrease in new build constructions – building permits issued in France were down 26.7% in the first quarter of 2023 – is equally worrying and goes hand-in-hand with concerns over the rising costs of materials (due to inflation), tougher environmental legislation, and changes in property tax rules. Experts say that all of these factors are turning buyers away from new builds, but it’s not just the property market that may suffer in the long run – if things don’t change, some 100,000 construction jobs could be under threat by the end of 2024.

Meanwhile, the French government has expressed an intention to review mortgage rules and look into other measures to address this impending housing crisis. 

After weeks of strikes over Macron’s controversial pension reform bill (which was passed into law in April), May was a comparatively quiet month on the strike front, and you’d be forgiven for thinking that the unions had given up on their long-running protests. Not so soon! Today (Tuesday, June 6^th), sees yet another day of nationwide strikes, marches, and demonstrations organized by French unions.

The strikes are unlikely to cause the same level of disruptions as before, but many schools and creches will be closed, and some disruption is expected on SNCF trains (9 out of 10 trains should still be running) and around a third of flights at major airports are expected to be affected. If you are travelling today, be sure to double-check your travel arrangements and be prepared for delays and longer-than-usual wait times.

As the weather starts heating up around France, 23 French departements have already been placed on drought alert and have corresponding water restrictions in place (some prefectures in the South have even begun banning the sale of swimming pools). Back in March, President Macron announced plans to cut France’s water usage by 10% by 2030, and this weekend the government launched their 2023 campaign to encourage households around the country to make small daily changes to their water usage habits.

Among the recommendations for French households this summer are the following:

• Install water-saving shower heads and tap heads that can reduce water usage by 50%.
• Take showers rather than baths, and keep showers under four minutes.
• Turn off taps when not in direct use (such as when brushing teeth).
• Only run washing machines and dishwashers when you have a full load, and use ‘eco-mode’ wherever applicable.
• Install rainwater collectors in your garden and use rainwater to water plants.

“Chaque geste compte!” – every action helps.