The French government’s recent announcement regarding Energy Performance Certificates has sent ripples through Paris’s property market. This technical adjustment represents more than bureaucratic fine-tuning—it’s a potential game-changer for international investors looking to buy or sell properties in Paris.

What are Energy Performance Certificates and what are the changes?

Energy Performance Certificates are mandatory assessments required for all property sales and rentals in France, rating buildings from A (most efficient) to G (least efficient) based on energy consumption and carbon emissions. These ratings directly impact a property’s marketability, rental potential, and value, making them critical considerations for any real estate investment strategy.

Starting January 1, 2026, France will lower its electricity conversion coefficient in EPC calculations from 2.3 to 1.9. This seemingly modest technical change will dramatically improve energy ratings for electrically heated properties, potentially moving approximately 850,000 homes out of the dreaded F and G categories that currently face rental restrictions now or in the next few years.

Properties previously considered “energy sieves” and banned from rental markets may suddenly become viable investment opportunities. For investors who have been watching certain Paris neighborhoods with concern over energy regulations, this opens new possibilities.

“This recalibration addresses a fundamental inequity in how we’ve been evaluating properties,” explains Paris Property Group founder Miranda Junowicz. “Electric heating systems, particularly in France where electricity is largely low-carbon, were being unfairly penalized compared to fossil fuel alternatives. This correction will restore balance to the market.”

Will This Change Actually Impact Your Investment Returns?

The financial implications are substantial. Properties currently classified as F or G face rental prohibitions that directly impact cash flow. By 2028, an estimated 1.3 million properties across France could be removed from the rental market without renovation—severely constraining supply in an already tight housing market.

For properties with electric heating systems, the coefficient change means a 17% improvement in their energy rating calculations. A property showing 300 kWh per square meter annually would drop to 247 kWh—potentially moving it from a restricted category to a rentable one without any physical improvements. However, buyers should note that while ratings improve, actual energy consumption and costs remain unchanged. 

Should You Act Before or After the Changes Take Effect?

“Even buyers with no intention of renting were deterred by poor EPC ratings,” observes Jennifer Jomard from Paris Property Group. “The stigma attached to F and G classifications affected resale values across the board, as purchasers worried about future marketability regardless of their immediate plans for the property.”

The timing might create a compelling strategic window for sophisticated investors. Properties with poor EPC ratings are trading at substantial discounts due to rental restrictions, while owners facing these limitations often find themselves motivated to sell. This presents an opportunity for investors comfortable with the regulatory timeline to acquire quality assets at favorable prices.

The government has announced a public consultation process—a formal period where stakeholders can provide feedback—set to begin before the decree is signed in early September 2025. This consultation represents a procedural formality rather than genuine uncertainty, as the adjustment follows mandatory European Union directives.

Once the coefficient change takes effect, properties benefiting from improved ratings will likely experience price corrections as rental potential returns. For investors willing to navigate the interim period, early positioning in electric-heated properties—particularly in prime Paris locations—could yield significant returns.

Should Current Owners Hold Until the Rating Changes?

For property owners with electric heating systems currently saddled with poor EPC ratings, patience strongly favors waiting. Selling a property classified as F or G today means accepting market discounts that come with rental restrictions and limited buyer appeal. Waiting until the new coefficient takes effect in 2026 could fundamentally transform the property’s market position. Jerome Cacarie from Paris Property Group notes that “owners of electric-heated properties currently facing these restrictions should seriously consider the timing of any sale, as the rating improvement could represent significant value without requiring renovation investment.”

This waiting strategy particularly benefits owners in prime locations where underlying property values remain strong despite EPC challenges. 

What This Reveals About France’s Long-Term Energy Strategy

This adjustment reflects broader shifts in European energy policy and France’s commitment to electrification. The change acknowledges that France’s low-carbon electricity grid makes electric heating more environmentally sound than previous calculations suggested.

For international investors, this signals France’s pragmatic approach to balancing environmental goals with housing market realities. The government recognizes that removing too many properties from rental markets would exacerbate housing shortages.

The European Union mandates a review of energy coefficients every four years to reflect changes in how electricity is generated across member states. The current adjustment from 2.3 to 1.9 follows this schedule, with the previous revision in 2021 lowering the coefficient from 2.58 to 2.3. France’s heavy reliance on nuclear power and expanding renewable capacity could justify further coefficient reductions in the 2029 review cycle, potentially making electric heating even more favorable in future EPC calculations and creating sustained advantages for electric-heated properties.

For investors and wealth advisors considering Paris real estate allocations, this regulatory shift represents both immediate opportunity and confirmation of France’s commitment to maintaining a functional property investment environment.

Contact Paris Property Group to learn more about buying or selling property in Paris.