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Paris property prices soar to highest levels ever

Property prices in Paris reached record highs at the end of 2018. And the bad news for anyone hoping to find a pied a terre in Paris is that this price escalation is expected to continue this year.

Paris property prices soar to highest levels ever
This picture taken on May 25, 2018 shows Haussmann buildings near the Champs de Mars in the 7th arrondissement in Paris. Photo: AFP

2018 was another historic year in Paris property sales – great news for sellers, financially crippling news for buyers. This was according to results unveiled in the Chamber of Notaries of Greater Paris on Thursday.

Purchase price per square metre continued to rise to record heights and the sales volume continues to grow (though it did dip slightly from 2017 peaks).

There are obviously huge differences between prices for Paris and its suburbs. The average price per metre in the Île-de-France region is 5,970 euros (4.5 percent more than in 2017). But you need an average of 9,750 euros if you dream of living in the heart of Paris, up 5.7 percent in one year.

The cheapest area to buy in the city centre is La Chapelle in the 18th arrondissement at 7,460 euros per square metre, which is still an increase of 11.3 percent since last year.

If you’re feeling a little flush, the most expensive area in Paris now is Odeon in the 6th at an incredible 17,410 euros per metre, a whopping rise of 28.3 percent in just one year.

One of the key causes of this continuing rise is the shortage of new houses being built. 

Notaries now estimate that the symbolic bar of 10,000 euros per metre squared on average in Paris (long presented as an impassable “glass ceiling”) will probably be reached as early as this summer.

READ ALSO:

How Brexit has made a Paris suburb the most expensive place to buy property in France

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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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