Paris Sets Its Sights on Owners of Second Homes

[88m3]

Paris Sets Its Sights on Owners of Second Homes
Property taxes on vacation homes in the French capital could rise to five times their current rate.

• FEARGUS O'SULLIVAN
• @FeargusOSull
  
• 9:56 AM ET
• Comments

Paris' Île Saint-Louis, where many expensive second homes are located. (Jean-Pierre Dalbéra/Flickr)
Owning a second home or vacant apartment in Paris may soon get a whole lot more expensive. If new rules agreed to by Paris City Council this week pass through France’s parliament, taxes on second homes in the city could rise to double that for primary residences, while taxes on permanently empty residential real estate would rise by four times.

The measures come as France’s capital goes all out to increase the volume of affordable housing available to local residents. A question mark still hangs over whether the proposal will pass into law—its ratification by parliament is not guaranteed and could take some time. The plan nonetheless reveals the city’s direction of travel. It wants to discourage the use of city center homes for secondary residences, and squeeze far more revenue out of the second homeowners who do hang on.

The proposed increases may seem drastic, but then the problem they seek to address is pretty sizable too. According to proponents of the new rules, Paris has 100,000 homes that are permanently empty (40,000 of them are no longer even connected to the electricity grid). The city also has an estimated 92,000 second homes, the majority of which, according to Paris Housing Commissioner Ian Brossat, are unoccupied for “three-quarters of the year.”

Having so many homes entirely or partly empty shrinks the pool of available rentals for permanent residents in the city. It also has other negative effects. When residents move to the suburbs because they can’t find affordable homes within the city, local businesses suffer as their customer base dwindles. Steadily, the vitality of many neighborhoods starts to wither. In places such as the expensive the Île Saint-Louis for example, the high volume of empty second homes means that the island’s long-standing calm is now almost sepulchral.


Rooftop 'Parasite' Homes Could Be the Future of Affordable Housing in Paris
No, really.

As of 2015, owners of second homes in neighborhoods with housing shortages have had to pay 20 percent extra on top of their regular property taxes, but even that surcharge is still relatively low. As Le Parisien explains, the average vacation homeowner on the Île Saint-Louis pays just €142 a year in property tax.

Leaving a home entirely vacant pushes up an owner’s tax bill further, but not by all that much. Currently, empty homes are taxed according to their “cadastral rental value,” a theoretical official estimate of how much rent a property could earn in a year. Preposterously, this rate is still lower for city center homes than it is for public housing, because it has been insufficiently reformed since in the 1960s. Currently, home owners must pay 12.5 percent of this cadastral rate in their property’s first year of vacancy, rising to 25 percent in the second year and onwards.

The new rules would be far less indulgent. Second homeowners would have to pay exactly the same rate of property tax as primary homeowners, a rise from 20 to 100 percent. Owners of entirely vacant property would pay 50 percent of the cadastral rate in their first year of vacancy and 100 percent in the following year.

The idea is to encourage more of these wealthy homeowners to sell, or at least rent their property to permanent tenants. If they don’t, City Hall can still score a win by boosting its tax revenues by as much as €100 million a year. Paris may be taking on a wealthy, powerful set of opponents with these measures, but there’s one good reason they can afford to take the risk. As the city has noticed, many of these owners are not registered to vote in local elections, because they don’t really live there.


If You Own a Vacation Home in Paris, Consider Yourself Warned

I have a feeling that's not the answer.

 

[Domingo Halliburton]

I'm surprised they don't tax air there.

 

[ⒶⓁⒾⒶⓈ]

"from all according to their ability to all according to need."

Watch what happens when the people with money and skill start fleeing from socialism...

time to start looking into shorting long term french bonds

 

[plushcarpet]

Paris used to be top 5 on my travel list

now it's top 5 on my no go list

won't catch me in some sharia law communist hybrid hellhole

 

[the cac mamba]

those poor 2-home owning people

did dudes not read the fukkin stats on those empty houses? pay the tax or let someone else who would use the house move in

 

[Scoop]

The problem here is the local government builds infrastructure to support these homes and then these homes are only occupied part time, meaning the residents are only spending money in Paris to stimulate the economy part time. It's an inefficient use of tax dollars.

Still, being taxed 5x is way too much. It should be no more then double.

 

[thekingsmen]

2016 H.L. threads..dry, boring and substance.

 

[ⒶⓁⒾⒶⓈ]

those poor 2-home owning people

did dudes not read the fukkin stats on those empty houses? pay the tax or let someone else who would use the house move in

the paris metro area has 12 million people...im guessing roughly 3-4 million homes..100k of them not being occupied puts pressure on the market but not that much...even if they were all owner occupied there would still be a problem


im guessing the reason for the housing shortage has some kind of previous govt intervention at its root like this one

Technically, location saisonnière, or short term rentals, are illegal in Paris and several other large cities (not everywhere in France). The law was originally intended to preserve the amount of residential space, because luxury rentals are considered commercial space, and are in competition with the hotel industry.

While the hotel industry lobbied hard to pass this law and avoid competition from landlords, the real beneficiaries were supposed to be Parisians, who would be able to find apartments more easily because the housing shortage would ease. After the law was passed, landlords who wanted to do short-term rentals in Paris were required to petition the mairie for permission, and show proof that they had converted an equivalent commercial space into residential space. In other words, the idea was that the total amount of residential space would remain the same.

and this

The issue of land availability for home-building is, above all, a question of there being not enough land with planning permission for projects of a sufficiently high density to ensure profitable housing developments. In other words, what is lacking is square metres of net floor space [3] rather than square metres of land. This is therefore a matter for local urban development plans and local political decisions.