Abolition of the TV License Fee + The Real Estate Market First Quarter 2022
Volume XX, Issue 33
ABOLITION OF THE TV LICENSE FEE!
Finally, the TV license fee, known as the “contribution à l’audiovisuel public” will be abolished in France as of this year. This represents a savings of €138 per year in mainland France or €88 in the overseas territories. Nearly 23 million households were liable for this tax.
The amended finance law (LFR) for 2022, published in the Journal Officiel of August 17, 2022, abolishes the contribution to public broadcasting which provides financing for public broadcasting: France Télévisions (France 2, France 3, France 4, France 5), Arte-France, Radio France, RFO, RFI and the National Audiovisual Institute (INA). This fee, which used to bring in 3.7 billion euros for the State, will be compensated by a transfer of a fraction of the VAT revenue until the end of 2024.
You would have seen this as part of your Taxe d’Habitation bill and maybe not even understood what it was or why it was being assessed. Every household or company that owns a television set on January 1st of the tax year must pay the public broadcasting contribution, or TV fee. Some people are exempt—in particular, people with a taxable income equal to zero, recipients of the solidarity allowance for the elderly or the disabled adult allowance (AAH).
As of La Rentrée, the TV license fee will therefore no longer be collected and refunds will be issued if you are totally exempt from the Taxe d’Habitation on your main residence and if you are only paying the TV license fee on a monthly basis. You will be automatically reimbursed in September 2022 by transferring to your bank account the amounts deducted in 2022. The monthly and installment contracts will be automatically canceled at the end of 2022. You do not need to do anything…the tax authorities will do it for you! The refunds apply to 6.2 million households!
I hope you will be one of them, as I will be…I hope!
THE REAL ESTATE MARKET SITUATION IN THE FIRST QUARTER OF 2022
The Chambre de Notaires de France recently published the real estate prices and trends for the 1st quarter of 2022, the evolution of real estate prices in Paris and in the provinces, and new trends in the real estate market, analyzed by the Notaires of France.
The Note de Conjoncture Immobilière N°56 Juillet 2022 dissects the situation of the real estate market in the 1st quarter of 2022 according to the geographical areas of Ile-de-France and the Provinces:
The volume of transactions of resale housing in France (excluding Mayotte) reached 1,182,000 transactions at the end of May 2022, reflecting a dynamic start to the year but revealing a high plateau, where volumes are close to the 1.2 million sales mark that they passed last summer. In particular, the current figures do not yet express the overall feeling of Notaires, who are signaling a slightly more pronounced slowdown in real estate activity in the months to come. In fact, there are signs that call for vigilance.
The supply of properties for sale is slowly dwindling, as is the number of pre-sale contracts, making it hypothetical that volumes will remain so high. This deterioration should be correlated directly with the rise in inflation (largely driven by the increase in energy prices), which is also affecting the purchasing power of the French, with The National Institute of Statistics and Economic Studies (INSEE) forecasting inflation of 6.8 percent in September (a level not seen since 1985) and 5.5 percent for the year 2022.
Similarly, although it remains moderate, the rise in home loan rates continues, excluding a growing number of people from the real estate market, particularly first-time buyers, faced with a greater demand for a down payment. The Notaires have noted an increase in the number of loan refusals. The rise in interest rates remains paradoxically very measured in relation to inflation, so that the loan, comparatively speaking, constitutes an investment, a certainty in an environment full of uncertainty.
The wave of buyers is still present, particularly in the housing market, pushing up prices on lower-quality properties, in the absence of sufficient supply. All of these macro-economic developments have nevertheless contributed to a sharp drop in the household confidence indicator since the beginning of the year, particularly in the opportunity to make major purchases, such as a property. This confidence indicator has thus fallen to the level recorded in 2013 and even in 2008, delicate periods for real estate activity. These points of attention are likely to cause blocking tensions in the real estate market, especially if they occur at the same time.
Note: Adoption on July 22 of the draft law on emergency measures to protect purchasing power by the National Assembly. Some of these measures concern, closely or remotely, the real estate sector: The deputies voted in favor of increasing personalized housing assistance (APL) by 3.5 percent retroactive to July 1. This increase would reassure investors.
Credit – Banque de France Results at end May 2022: The deputies have adopted a “rent shield” with a cap on the rent reference index at 3.5 percent from July 2022 to June 2023 in order to limit the impact of inflation for tenants. This text, adopted on first reading, must be supplemented by a rectifying finance bill, the examination of which at the National Assembly began on July 22: The government is committed to maintaining the tariff shield introduced at the end of 2021, which will cap the increase in electricity bills at 4 percent and freeze gas prices at their October 2021 level. This measure will be extended to the end of 2022 if the bill is passed. This temporary measure could reassure buyers and limit the loss of purchasing power, which has been greatly reduced by the rise in energy prices. The introduction of a discount on fuel prices could support the need for greenery expressed at the time of purchase and help control the cost of commuting outside of the hypocenters, subject to the final adoption of these provisions by Parliament.
The annual growth rate of outstanding loans to individuals remained high at +6.4% in May, still driven by the housing component (+6.8%). New housing loans increased again, to 27 billion (22.4 billion excluding renegotiations), the highest level reached in the last five years. The rise in interest rates on new loans continued, averaging 1.26% in May, compared with 1.19% in April. The estimate for June indicates a gradual increase in the average interest rate on new loans compared to May, reaching 1.33%, with monthly production of housing loans still very strong (26.4 billion euros), leading to a slight increase in annual growth in outstanding loans (+6.9%).
To learn more, download the PDF (in French).
The Adrian Leeds Group
P.S. Along with La Rentrée, we’ll be gearing up for our fall sessions of Après-Midi. Have a look at our round-up and be sure to not miss a one!