Paris wants to quintuple the surcharge on second homes

The mayor of Paris voted yesterday for a sharp rise in housing tax for second homes, asking that this increase be registered and passed by Parliament in the draft budget coming at the end of the year.

The proposed increase from the current 20% mark which has been in place since 2015 is of 100%, but only for “tension zones” namely Paris, the French Riviera, the Côte Basque, etc. This new rate would include some 90,000 second homes in Paris.

The measure, which generated €21 million in receipts in 2015 could generate an additional €70 million, but is more being seen as a way of pushing the owners to rent or sell their property so they can be inhabited.

According to electoral stats, the majority of these second homes are located in the most residential districts, between the 1st and 8th arrondissements of Paris.

A controversial surcharge

Effective from this year the 20% countrywide surcharge on second homes has not achieved its original objective, which was to encourage owners of vacant property to sell or to put on the rental market. One might think that this was because second homeowners can often swallow such an extra cost, but in fact it did not even get to that stage.

French municipalities were given the choice of whether to impose this extra tax and in the end only 98 out of a 1200 applied for the 20% increase. Locations with strong tourism demand were of course among those who applied, such as Paris, but also Toulouse, Nantes and Montpellier.

Most municipalities in the south adopted the tax, with more than a quarter of the identified towns located in the Alpes-Maritimes (Antibes, Le Cannet, Vence …). 16 Haute-Savoie municipalities have also decided to apply the surcharge. However with only 8% of municipalities opting for the application of the, the general consensus is that the government has fallen short of its goals.