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Money Matters and Legal / In Law

Increased Tax on Second Homes Approved in Paris


Having been made available by the National Assembly in November, the increased tax on second homes has been voted through in Paris. How much extra will landlords have to pay because of this? 

First introduced in 2014, the surcharge on the taxe d’habitation is intended to alleviate pressure on housing supply in sought-after areas. The Conseil de Paris, the town hall, was almost certain to pass the new surcharge. Prices grew 5% in the capital last year, and a study from 2014 revealed it contained 107,063 vacant properties (defined as empty for more than four months a year).

Rising from 20% to 60% thanks to an amendment to the budget in November, the average surcharge has gone from €180 to €540. It is expected to bring in around 150 million euros a year in revenue, similar to the amount it raised in 2015, its first year of implementation.

The move has been denounced by housing associations, notably the UNPI. In an official statement in December regarding the possibility of the increased tax, the lobby group pointed out that “some landlords already pay up to three months rent in the form of property taxes each year.”

Unfortunately for landlords and the UNPI, this might not be the end of the surcharge saga. The dominant Communist Front coalition in the National Assembly wishes to see the tax raised even further, some going so far as to propose a three-fold increase, increasing the base rate by 300% rather than 60%.

Such a hike would certainly have more of an effect on the market, putting landlords an extra €1620 out of pocket. Worth it for a holiday home in the capital? It remains to be seen whether this 60% rise in Paris will encourage landlords to sell or rent out their vacant property. Of the thousand or so municipalities to whom the tax is available, a minority apply it.

The mayor of Montreuil, an up-and-coming suburb in the east, chose to apply it in the hope of raising half a million euros and slowing price growth. The other side of Paris, the wealthy suburb of Sceaux’s mayor didn’t but nor did he rule out using it in future. Biarritz’s mayor Michel Veunac, who implemented the 20% surcharge in 2015, said that a rise in communes like his on the coast was unlikely for now.

image © Wikicommons


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