France energy regulations impact rental market and property values

New regulations under France’s climate law are significantly impacting the rental market. As of January 1, 2025, properties classified as G under the Diagnostic de Performance Énergétique (DPE) are prohibited from being rented. This ban is set to expand progressively, targeting F-rated properties in 2028 and E-rated properties in 2034.

Additionally, a regulatory change implemented on January 1, 2026, has affected approximately 800,000 homes. The government reduced the electricity-to-primary energy conversion coefficient from 2.3 to 1.9. This adjustment reflects updates to the electrical grid and allows many homes heated by electricity to move up one energy class without requiring physical renovations.

Experts warn that property owners must verify their current DPE status, as relying on obsolete diagnostics can result in a loss of 10% to 20% of a property’s market value during a sale.