Paris 1-4 Arrondissements
City center of Paris is experiencing the same problems as many metropolises around the world : rising housing prices in the urbanized area of the city is driving more foreign investors, bankers, and real estate companies to buy properties, while locals generally occupy the outskirts of the city. 20% tax is set in 2015 for second homes to mitigate this problem of empty units. However, this tax seemed not enough; to solve the problem, now the tax sits at 60% in January 2018.
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. The situation is particularly worrying in the 2nd arrondissement, where the number of empty homes shot up by 6 percent during the 2008-2013 period, and the 4th arrondissement, where 29.8 percent of homes are currently vacant.
Many cities world wide are facing this problem, and some have introduced similar taxes. Vancouver and Sydney are such examples where the city has implemented a vacancy tax to moderate the amount of empty homes present in the city. This, however, is a risky move. as it might discourage investment and economic growth of the area. The recent drastic increase in Paris’ tax amount might also contribute to lowering the prices of the housing market, as is evident from the sudden influx of sales for these apartments on the housing market since the announcement.
RELATED MEDIA COVERS
CITYLAB: Paris Sets Its Sights on Owners of Second Homes
FRENCH-PROPERTY.COM: France's Empty Homes