Britons with a pied-à-terre in Paris are due to be hit with hefty new taxes as the Socialist-run city hall takes steps to try to resolve the city’s chronic housing shortage.
The city council wants to stop foreign owners leaving their apartments empty for much of the year and hopes to coerce them into selling them off or putting them on the market for long-term rental.
A measure due to be adopted next Monday by the city council would triple the current 20 percent extra that non-resident owners have to pay in council tax, or taxe d’habitation, to 60 percent.
Ian Brossat, the Communist deputy mayor in charge of housing, said the aim of the tax was to ensure that Paris did not end up like London, with the working and middle classes increasingly priced out of the housing market.
“That is exactly the model we want to avoid here in Paris,” he told the Telegraph.
The number of non-resident owned homes in Paris rose by 43 percent over the last 15 years, while owner-occupied homes rose by just three percent in the same period.
Non-resident owned homes now make up 10 percent, or around 107,000 residences, of the 1.1 million homes in Paris.
This growing trend is depriving Parisians of homes and driving up rents, the city argues.
The proposed rise in council tax for non-resident owners would bring an estimated extra 43 million euros a year into city coffers as well as making more affordable housing available to permanent Parisians.
Mayor of Paris Anne Hidalgo
Mayor of Paris Anne Hidalgo
The new tax plan is the latest in a series of measures the council, led by Socialist mayor Anne Hidalgo, has taken in recent years to try to ease the housing shortage.
Last year rent caps were a rolled out across the greater Paris region, to the dismay of real estate agents and property owners who warned that they could discourage investment and bring down property prices.
The city is also fighting an ongoing battle with Airbnb and now makes the rental website collect tourist taxes for it from renters.
Estate agents in Paris differ on whether the plan to triple council tax would discourage investors buying second homes in Paris. But several agreed that the measure would probably fail to achieve its stated aims.
“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,” said Trevor Leggett, whose estate agent’s of the same name handles thousands of properties across France.
“It’s bad press for Paris at a time when they are hoping to attract people from London who might want to relocate due to Brexit,” he said.
But Alon Kasha, the owner of AB Kasha estate agent’s which specialises in high-end property for foreign owners on the Left Bank, said the new measure would have limited impact.
“It’s a non-issue,” he said.
He noted that a rise of 60 percent on council tax of around 1,500 euros a year on a property worth a million euros would deter few people from buying.
“People might groan for a second but I don’t think it would affect the value of a property,” he said.