The acronym DPE is commonly used in the real estate and construction sectors. The Energy Performance Diagnostic is indeed a tool for estimating a property’s energy consumption and its greenhouse gas emissions. This diagnostic and the related information have now become mandatory for selling or renting a property. On January 1st, 2025, new regulations will come into effect regarding DPE standards.
What will this change? Let’s take a look at the characteristics of this upcoming reform.
DPE: What does it consist of?
The DPE (Energy Performance Diagnostic) is an estimation method that was introduced in 2006. This document has been mandatory for several years now for selling or renting a house or apartment. That’s why on real estate listings in Paris or elsewhere in France, it is currently required to indicate the property’s energy performance rating.
During a property valuation, the Energy Performance Diagnostic is a key element that significantly enhances the value of a property.
How is the DPE calculated?
The DPE is calculated based on the energy consumption of a property and the energy bills of tenants or owner-occupiers. One of the main elements of this calculation is the thermal resistance coefficient of insulating materials used in the building’s walls. However, this calculation also takes into account:
- the quality of the glazing,
- the heating system,
- the home’s hot water system,
- the quality of ventilation, etc.
How is the DPE of a home evaluated?
The DPE is carried out during an audit that assesses the energy consumption of the occupants. The diagnostician will also evaluate the amount of greenhouse gas produced by the property. There are a total of 7 classes, determining several categories represented by letters A, B, C, D, E, F, G. Letter A corresponds to the most energy-efficient homes, while letter G represents the most energy-consuming properties. Each home is assigned a label, ranging from green to red.
What is the purpose of the DPE?
The DPE serves as a diagnostic tool to assess a property’s energy performance. It helps identify any necessary insulation work. It also raises awareness among buyers and tenants about the ecological transition to protect the environment.
A Closer Look at the New Climate & Resilience Law
On January 1st, 2025, the Climate & Resilience Law will come into effect, modifying the Building Code (CCH). This measure complements actions already taken by the government to improve energy consumption in homes across mainland France. In fact, as of 2023, G+ rated homes were banned from being rented.
What are the goals of this new measure?
The primary goal of this new law is to reduce the number of homes that can be considered thermal sieves. The government aims to encourage property owners and landlords to renovate their homes to make them more energy efficient.
In the long term, this policy seeks to reduce the carbon footprint of French properties and improve their energy performance. This will have a dual positive impact: decarbonizing French buildings while significantly reducing energy bills for occupants.
What does this new decree entail?
In practical terms, this new reform will ban the rental of G-rated properties across the entire French real estate market, starting from January 1st, 2025.
Then, by 2028, F-rated homes will also be affected by this ban. E-rated properties will be impacted by the measure starting in early 2034.
What are the impacts for property owners?
This new regulation affects all owners of G-rated properties. As of January 1st, 2025, owners of such homes will no longer be able to rent them out in their current state. This applies to both new lease contracts and renewals.
Another point to consider is that if the owner does not carry out renovation work to improve the property’s DPE, they will not be able to increase the rent. The rent amount will be frozen until the legal energy performance requirements are met.
What are the options for owners of G-rated homes?
If you own an energy-inefficient property (rated G or F), you still have 2 to 5 years to start your insulation and energy renovation work. The cost of such work is generally significant, which is why the government offers financial aid to help renovate your home, such as MaPrimeRénov’. This assistance, provided by ANAH, offers valuable financial support to cover your energy renovation work.
Whether you are an owner-occupier or a landlord, renovating your home to make it more energy-efficient is a beneficial solution in many ways. Not only will you save on energy bills, but you can also use this as a selling point when putting your property on the market.
