Paris is hiking the council tax bill for absent foreign property owners, in a move to discourage non-resident investors leaving homes unoccupied.
The French capital has long been a popular destination for overseas investors, thanks to its importance on the global financial and economic stage, as well its lifestyle appeal. According to data from city officials, the number of non-resident owned homes in the city has rised by 43 per cent in the last 15 years, while owner-occupied homes have risen by 3 per cent in the same period. As a result, non-resident owned homes make up 10 per cent of the 1.1 million homes across Paris – and officials are concerned this is having a detrimental effect upon the market for locals.
The concerns are nothing new for most major cities, with Sydney, Auckland, Vancouver and London all sparking debates in recent years about the levels of international investment in their real estate, particularly at a time when many of these cities are suffering from a shortage in supply.
In recent years, Paris has introduced a series of measures to try and help the housing shortfall, from a rent cap to an ongoing battle with Airbnb that sees the flat-renting site collect tourist tax from renters. Its new council tax rule is the latest to be introduced by Socialist mayor Anne Hidalgo, with foreign owners absent from their properties forced to pay 60 per cent in council tax (taxe d’habitation) – up from the standard 20 per cent facing all foreign owners of parisian property. The hope is that this will encourage foreign owners who do leave their properties empty for the majority of the year to rent their home on the market for others to use, or to sell up altogether.
Ian Brossat, the Communist deputy mayor in charge of housing, tells The Telegraph that the tax was intended to stop Paris following in London’s footsteps, where the lower classes are priced out of the property market.
“That is exactly the model we want to avoid here in Paris,” he commented.
Reception in the property industry has been mixed, with Trevor Leggett, Chairman of estate agency Leggett Immobilier, telling the paper: “This would stop people buying in the future, but I don’t think it would make anyone who is already an owner (of a second home in Paris) either sell or rent out their property long-term.”Google+