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PROPERTY

Prices of property in Paris go through the roof (unlike the rest of France)

New figures show the price of property in the French capital have risen sharply over the last 12 months, which is changing the profile of homeowners in the French capital.

Prices of property in Paris go through the roof (unlike the rest of France)
Photo: AFP

The figures obtained by Le Monde newspaper from the Century 21 real estate agents – one of the biggest in the capital, reveal some frightening details for those who are hoping to buy a flat in Paris.

For a start, the average price of a square metre is now €8,942, a rise of 7.7 percent since last year. Meanwhile the average price of a square metre across the rest of the country has risen just 1.5 percent.

And in another contrast between Paris and the rest of France, apartment prices in the capital have shot up by 45 percent since 2009, compared to 9.5 percent in the rest of the country.

In less than 10 years the average price of property has gone up by 33 percent and since the year 2000 the value of apartments in Paris have tripled.

“It’s shocking,” Laurent Vimont from the Century 21 property agency told Le Monde.

He believes the symbolic price of €9,000 per square metre will be exceeded. The average price per metre square around the country is €2,532, far below the prices in Paris.

“Paris is on the way to a new record,” he said.

Vimont said the rise had naturally had a major impact on the kind of people able to purchase property in Paris.

“Paris, with an average purchase price for an apartment of €446,982, has become an exclusive city, reserved for high earners (management and liberal professions), who now account for 46 percent of purchasers.

“At the same time, the percentage of workers and employees buying apartments has halved, from 13.9 percent to 6.8 percent.”

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According to analysis, there are a few reasons to blame for the steep rise in prices over the past year.

The election of Donald Trump, Britain’s decision to leave the EU and Emmanuel Macron’s election in France have apparently all played a role in boosting property prices in the French capital, according to Le Point.

Brits and Americans are apparently deciding now is the time to buy in the French capital and with the election of the pro-business Macron, who has vowed to kick-start France’s economy, the stars appear to have aligned.

A recent survey of notaries in the capital concluded that Brexit was helping push Paris property prices to record levels.

“The number of buyers is rising unstoppably,” said Paris notary Thierry Delesalle.

Demand was outstripping supply, particularly for the most select properties, “and perhaps because of Brexit,” Delesalle said.

While Italians were the biggest group of foreign homebuyers in Paris, snapping up 17 percent of properties sold to non-French buyers, Britons came second, accounting for 10 percent of such transactions.

Nevertheless, foreign buyers only represent five percent of the 40, 000 annual property transactions that take place in Paris.

Marie-Hélène Lundgreen, director of the luxury real estate agent Belles Demeures told Le Point: “Americans are looking at Paris once again. They are still cautious because of the attacks, but they think Emmanuel Macron is going to save the world.”

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PROPERTY

What second-home owners need to know about 2023 French property taxes

Autumn in France is property tax season - and for second-home owners there are some important changes to know about this year.

What second-home owners need to know about 2023 French property taxes

Every year in September and October, households in France receive their property tax bills – which have historically included three things; taxe foncière, taxe d’habitation and the redevance audiovisuelle (TV licence).

For main properties, two of these taxes have all-but disappeared, but for second home-owners the situation is a little different.

Taxe d’habitation

This is the tax paid by the householder and it is being gradually phased out in France and most households no longer need to pay it – the exception to this, however, is maisons sécondaire (second homes).

Local councils set the rate for this tax, and in some areas this can include an additional surcharge on taxe d’habitation on second homes.

This usually applies in areas that have a housing shortage, and although the surcharge has existed for several years it has recently been expanded to include new areas.

Taxe foncière

This is the tax paid by the property owner and this remains in place, and in some areas has increased. Some local authorities, faced with the shortfall in overall taxe d’hab funds, have increased surcharges on the tax for second homes, while most local authorities are also increasing taxe foncière charges to offset the drop in revenues.

This tax is calculated based partly on the size and value of the property you own (which is why if you do any major renovations or add a swimming pool you need to tell the tax office) and partly on the tax level decided by your local authority. 

This means that the actual rate varies quite widely between different parts of France, but in some areas it has gone up by 20 percent.

Redevance audiovisuelle

This is the TV licence and this has been scrapped this year – including for second homes – so your bill will no longer have the €138 per household TV charge. 

Waste collection taxes

Some communes, especially in rural areas, also charge a taxe d’enlèvement des ordures ménagères (TEOM) or la redevance d’enlèvement des ordures ménagères (REOM) to cover rubbish collection. These are also payable in the autumn, although dates and amounts vary from commune to commune.

Renovation projects

If your property is what real estate agents refer to as an ‘opportunity for renovation’ you may be exempt from taxe d’habitation if your property is uninhabitable.

This is this is strictly defined in France as meaning a property is unfurnished, is not connected to utility services, and/or needs work costing at least 25 percent of the value of the property to make it habitable.

Other information

The amount of both taxe foncière and taxe d’habitation varies across France, but you should be informed in the sale details of the amount of the taxe foncière, and you can also request to know the amount of the taxe d’habitation when you buy a property. 

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Second homeowners are not eligible for most reductions or exemptions available on taxe foncière, with the exception of over 75s who are on low incomes. Be aware this is not automatic for second homeowners and must be specifically requested by those who are eligible.

Be aware, too, that authorities can charge an additional 10 percent for late payment without good reason – though you may get this removed if you write a polite formal letter asking for a remise gracieuse de la majoration. You can search for model letters on the internet.

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