New Tax Hike in Paris to Affect non-Resident Property Owners
Brits who own homes in Paris, yet are not residents there are set to be hit with a huge tax increase in an effort by the city council to resolve the severe housing shortage. The new increase in the annual Taxe d’Habitation is set to rise from 20% to 60%, and it is due to be adopted on Monday Feb 6 2017. Intended to push non-residents who own homes in the city to either sell or put up their flats for long term rental, this tax increase is being put in place to ensure the working and middle class are not priced out of an increasingly competitive housing market. The number of non-resident owned homes has increased by 47% in the past 15 years, with owner occupied homes increasing by just 3%. Non-resident owned homes now make up a mammoth 10% of the 1.1million homes in Paris.
If this is happening in Paris we must ask how long it will be before this tax reaches the Alps. With housing in short supply, and property prices constantly increasing, the locals who call the French mountains home are getting slowly but surely priced out of the market. Eric Fournier, mayor of Chamonix has recently spoken out against the sale and construction of large chalets that non-residents leave empty for much of the year. With constructible land in short supply, he wants to limit the sale of large plots of land to foreign buyers who build large chalets which aren’t in use for the majority of the year and utilize this land for the permanent populations of the towns.
Despite the introduction of the tax, estate agents in Paris differ on whether it would discourage investors buying second homes in Paris, and several have stated that the measure would probably fail to achieve its aims. Alon Kasha, owner of AB Kasha estate agents which specializes in luxury property for foreign owners has said that an increase to 60% on council tax which is around €1500 a year on a property worth a million euros is unlikely to deter people from buying.