Resicom – Holiday Investment – 04-21 – LB

Paris Tax Rise On Overseas Property Investors

Overseas property investors who have purchased in Paris could be taxed at a much higher rate if they leave their properties empty from now on.

The city council of Paris, which is now socialist run, plans to implement new measures that will triple the taxe d’habitation that non-resident owners have to pay from 20 per cent to 60 percent.

The increase in taxation is just the latest measure brought in by socialist mayor Anne Hidalgo to ease the housing shortage in Paris following rent caps introduced last year across the greater Paris area.

The council already forces Airbnb to collect tourist taxes from all renters on their behalf.

Communist deputy mayor in charge of housing, Ian Brossat, said that 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.

Over the last 15 years the number of non-resident owned properties in Paris has risen by a huge 43 per cent, compared to a rise of only 3 per cent for owner-occupied properties.

The number of properties owned by non-residents has now reached over 107,000 representing around 10 per cent of the 1.1 million properties in the French capital.

The measure is expected to bring in an extra 43 million euros per year to the council.

Property companies however believe that it will make little difference. Owner of AB Kasha, Alan Kasha, who sells high end property in Paris to overseas property investors said that the extra average cost of around 1,500 euros per year is a ‘non-issue’.

He commented: ‘People might groan for a second but I don’t think it would affect the value of a property.’

The council are looking to encourage long term rental of empty homes, so overseas property investors renting their properties out on long term rental in Paris will not be affected by the new tax increase.

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