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HOUSING

House prices in Paris on their way down

In Paris it’s hard enough to find a suitably-sized cupboard that’s affordable. But there was good news for those seeking to buy a home on Thursday with confirmation that house prices in the French capital were on their way down.

House prices in Paris on their way down
The price of property in Paris is on its way down. Photo: unicellelar/flcikr

The slight reduction in prices for property can be explained by the drop in the volume of sales. In the fourth quarter of 2012, apartment sales plummeted by 12 percent in Ile-de-France compared with the same period in 2011.

Surprisingly, this drop was most evident in Paris itself with a reduction of 21 percent – the same as in 2008 – with just 5,930 properties sold in the final quarter. 

In total, just 27,690 apartments in Paris were sold in 2012, only a fraction more than in 2009 when the crisis hit. On average house prices fell by 1.3 percent in the third quarter of 2012 and 0.4 percent in the final quarter.

According to the French Chamber of Notaries, there are indications that “this downward trend will continue for the next few months in the capital," Le Parisien reported.

However, the Chamber said that the current drop in sales was no reflection on the demand for housing, insisting “buyers remain motivated”, and that “interest rates are historically attractive”.

“The difficult and distressing economic climate does not encourage potential buyers to commit to long-term purchases," the Chamber added.

Currently, the average price per metre squared in Paris stands at €4,420 in the outskirts of and €8,270 in the city centre.

Some areas of Paris, however, remain untouched by the phenomenon. According to Le Parisien, the most expensive properties can be found in La Monnaie at €14,730 per square metre. Odéon, also in the sixth arrondissement, is still out of reach of the most buyers where the average property costs €14,170 per square metre.

The capital’s cheapest properties can be found in La Goutte-d’Or and La Chapelle at €6,220 per metre squared in the 18th arrondissement.

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PROPERTY

Property taxes: How much will it cost to extend your French home?

Installing a swimming pool, building a garden shed, or adding a conservatory to your French home has become more expensive in 2023.

Property taxes: How much will it cost to extend your French home?

If you are planning a renovation project in 2023 you’re likely looking at rising cost for materials and labour due to inflation – but there is one other cost to consider; taxes. 

In France there is a one-off tax that has to be paid on certain building works, and the government has raised the rate for this.

The taxe d’aménagement, sometimes referred to as the garden shed tax, applies to all property development – construction, reconstruction and extension – of buildings that require planning permission or a building permit.

Garden sheds, swimming pools or extensions with a surface area of more than 5 square metres are subject to the development tax – although a 50 percent reduction is applied to the flat-rate values of certain buildings, particularly the first 100 square metres of main residences.

READ ALSO Everything you need to know about installing a swimming pool at your French property

The tax is collected by local councils, who set their own percentage rates for the tax, working off the base rate set by the government.

A decree published in the Journal Officiel set the base figures for 2023 at the following rates: 

  • €1,004 per square metre in Île-de-France (up from €929 per square metre in 2022);
  • €886 per square metre outside Île-de-France (€820 per square metre in 2022).

The flat-rate values per square metre of building space, which constitute the basis for the development tax, are revised on January 1st of each year according to the latest construction cost index published by national statistics body Insee. 

Additionally, specific rates are set for:

  • €250 per square metre  for a swimming pool (up from €200 in 2022);
  • €12 per square metre of ground-fixed solar panels (up from €10 in 2022);
  • €3,000 per wind turbine more than 12 metres high;
  • €3,000 per pitch for tents, caravans and mobile leisure homes;
  • €10,000 per pitch for a holiday chalet or bungalow.

The amount of the tax is calculated according to the following formula: 

(Taxable area multiplied by the government-set base figure) multiplied by the percentage tax rate set by the local authorities. This gives the total to be paid in cents. Bills are rounded down.

So, the tax for a 30 square metre extension in an area where the combined local and departmental tax rates total 6.25 percent would be calculated like this:

30 (the size of the development) x 886 (the base tax rate outside Ile-de-France) = 26,580

6.25 (local and departmental tax) x 26,580 = 166,125 cents, more usually expressed as €1,661. 

If the total payable is less than €1,500, you will receive a bill in the six months after planning permission was granted, with details of how to pay.

Otherwise, it is paid in two instalments, 12 months and 24 months after authorisation, with a 10 percent surcharge applied in cases of late payments.

READ ALSO The hidden costs of owning property in France

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