In China, for ordinary people, the most thrilling place is the real estate market. If one is constantly interrupted, it is possible for oneself to carry tens of thousands or even hundreds of thousands of additional new debts. Knowing that the house price has been rising, it is often not so reconciled to make this determination. What if it falls? I made a decisive decision, and I worried that I would spend my whole life on this set or several houses. What if this big bubble really burst.
So, in the same global village, the same people of the earth, the French are not keen on buying and speculating real estate, why is this?
About 58 percent of people in France own their own home, according to the annual statistics from the French National Institute for Statistics and Economic Research. This value is not high, and it ranks quite low in the EU 28. Some experts vindicated France and said that the high rate of self-owned housing in many European countries is because of political turmoil in their countries, which led to a sharp drop in housing prices. Everyone bought their own houses like Chinese cabbage, such as the former Soviet Union countries.
Among the remaining 42% of the “proletarians” in France, there are those who do not want to buy a house by nature, and think that renting a house has nothing to do with it, and they can leave as soon as they want. For more people, the mountain that stands in the way is money!
Let’s collectively envy the French housing prices, especially the relatives from the imperial capital and the magic capital. Except for a few large cities and international scenic cities in France (especially Paris, the average house price at the end of March 2017 was 8,800 euros per square meter), the rest of the house prices are not high. The median salary of the French is 1,772 euros. If a husband and wife work for 2,800 euros after tax, they can afford a square meter in many places (I risk being expelled by the French when I say this, who doesn’t? Buying a house with one month’s salary or not? But don’t Chinese people compare like this?
So why do they still have no money to buy it?
The reason comes from the loan in the first place. The vast majority of people do not have the ability to buy a house with cash, but some people do not even have the ability to take out a loan. France has very strict requirements for loan conditions. In addition to providing a long-term work contract, salary slips, and proof of your repayment ability, it also stipulates that the total monthly repayment cannot exceed one-third of your net salary. Not everyone who has a job has a long-term work contract. In France, long-term contracts account for about 85% of all work contracts, but due to the super protection of employees in France Three are long-term contracts. Without a long-term contract, you are not eligible for a loan. Also, older people and people with illnesses cannot get loans at all. Those who qualify for a loan still have two bills to settle.
For a considerable number of people with long-term contracts, it is difficult to spend a third of their salary to buy a house in order to meet the various expenses of the family. However, the lower monthly payment means that the loan time is longer and the loan interest rate is higher. It also means that the available funds are insufficient for a long time, and it is difficult to cope with the maintenance of the house in the future, the expenses of the children’s higher education, saving for the pension, and so on. Wage growth in France is extremely slow, so big wage increases cannot be expected to fill these gaps.
In addition, France has a wide variety of taxes, and the tax rate is also high (will be discussed in detail below). After buying a house, the cost of maintaining a house is also a factor that has to be taken into account. If the nature of a person’s work is to be transferred every few years, then buying a house may be a loss-making business. For example, in Lyon, it is more cost-effective to buy a house and live in it than to rent a house for more than 13 years. What drives the real estate market demand, in addition to buying a house for self-occupation as mentioned above, is real estate speculating, earning the price difference in buying and selling or buying a house for rent, the so-called investment real estate. Then let’s talk about the second room.
A survey by the French polling agency Opinion Way found that the French are conservative. Only 13% of people invest in the high-risk stock market, but 60% of them agree to invest in real estate, and 34% of them invest in real estate. However, the average age of initial investment is 46 years old, which is much higher than that of Chinese people.
Also, their first motive for investing in real estate is not to make money. It is obviously illogical to not like to buy a house to speculate, and to buy it for the sake of making money! It’s not that the French are stupid, it’s that they are forced to do nothing. Even if you calculate how it is not profitable to speculate in French real estate, what are the motivations of people who invest in real estate.
Case 1, two rooms for rent
Someone wants to buy an apartment for rent. The value of the apartment is 150,000 euros. The agency fee + notary fee + transfer fee document fee, etc., is about 15,000, and the total cost is 165,000.
- The monthly rent is 1000 euros.
- Monthly expenses are about 30%-40% of monthly rent, including:
*Approximately 5% of rental income for home maintenance
*Common cost sharing of approximately 5% of rental income
*A homeowner tax of about 8% of the rental income (in France, after buying a house, a certain percentage of the homeowner tax is paid every year for the house under the name)
*Intermediary management fee of about 10% of rental income (many people do not have time or invest in different places, the house is taken care of by the intermediary, who is responsible for finding tenants, viewing the house, going through a series of procedures, etc.)
- Occasional vacancy periods and non-payment of rent from bad tenants
It’s not over yet. Because this is the investment income of the second house, the income from this income is subject to tax, and it is paid according to the monthly rental price! so,
· 19% income tax on monthly rental income
· Social contribution of 15.5% of monthly rental income
Primary Maths: 1000X (1-30%/40% – 34.5%) = 255/355 EUR
The monthly rent really falls into the pocket of 255 to 355 euros.
Did you really make that little money? still none! In France, there are very few people who can spend the full amount of 150,000 euros to buy a second room. Then, the loan increases, and this small rent cannot even pay the monthly payment.
Rent can be raised! You can also kick out the tenant who doesn’t pay the rent! The answer is no.
Rental prices in France and even the prices charged by housing agents are regulated by the government. The rent price cannot be higher than 20% of the government reference price. A 150,000 house can be rented for 1,000 euros, so there is basically no room for price increases. As for evictions, French law states that from November 1 to March 31, a landlord has no right to evict a tenant even if they do not pay rent. . .
Fortunately, the French government’s constant and tried-and-true trick over the years can attract some people to buy houses and invest under the suppression of the high tax policy that restricts real estate speculation – that is, tax reduction. This is the main motivation for the French to invest in real estate. France has a high income tax. According to the step-by-step tax system, if a married couple works with a higher salary, they will soon enter the 30% tax file. If part of the tax can be reduced or exempted, it will also help to improve the living standard of the family!
The Pinel law introduced in France in 2015 stipulates that people who buy a new house or an off-plan house and rent it out can enjoy a tax exemption of up to 6,000 euros per year for 9 to 12 years depending on the length of the lease.
If you can’t make money from buying a house and renting it out, it’s good to have less diplomacy!
French law stipulates that if the second room is held for less than six years, the full value of the house price appreciation must be taxed, that is, 34.5%. For more than six years, the tax rate will be gradually reduced, holding for 22 years, exempt from value-added tax, holding for 30 years, exempt from social contribution. This is a great effort to combat real estate speculation! For rare animals, there is no harm if there is no sale, and for real estate speculation, there is no motivation if there is no profit. When it is unprofitable to sell houses, when the rental market has better regulations to protect vulnerable groups, as in France, when there is no spare money, and no money, naturally there will be no more enthusiasm, and the plot of buying a house should be put aside for the time being in the face of reality. . It is obvious that high housing prices and high tax rates always have to be on the side. Rooster head, hen head, which head do you prefer?
Under the national policy of “houses are for living, not for speculation”, the French real estate policy is indeed worthy of our reference. The current housing prices in China require the savings of generations of Chinese families to provide for a house. Therefore, the happiness index of Chinese people does not matter. However, the house is so important in the concept of Chinese people. It is what most people want to see if they can reasonably solve the real estate problem. In the continuous improvement of the rental market such as 58.com, the state has initiated the construction of apartments held by various countries. In the future, with the continuous improvement of various real estate policies, I believe that real estate problems related to people’s livelihood will be better solved.