Paris raises vacant home tax to spur rentals amid housing crisis

Paris is set to significantly increase taxes on vacant homes starting in 2027, a move designed to combat the city's severe housing crisis. The socialist-led city council aims to incentivize owners to rent or sell their unoccupied properties, estimating that around 20,000 homes could be reintroduced to the market.

Under the current regulations, which replaced a national law from 1999, taxes on vacant properties are 17% in the first year and 34% from the second year. However, municipalities can raise these rates to 30% and 60%, respectively. The Paris City Council's decision will mean a substantial increase in costs for owners. For example, the owner of a 30-square-meter apartment in the 17th arrondissement, who currently pays an estimated 790 euros in taxes, will see this rise to 1,400 euros in 2027 and 2,800 euros from 2028.

Conservative opposition members have criticized the measure, labeling it "useless" and a "fiscal attack" against property owners. A property is considered eligible for this tax if it has been vacant for at least a year in a city where demand far outstrips supply. The tax is calculated based on the property's cadastral rental value, with no deductions or bonuses.

According to 2023 data from the French National Institute of Statistics and Economic Studies (INSEE), Paris had approximately 139,075 vacant homes, representing about 10% of the total. Another 140,000 are secondary residences, meaning roughly 20% of Parisian homes are not primary residences. The city council clarified that exemptions will remain for cases where vacancy is beyond the owner's control, such as properties tied up in legal proceedings, inheritances, major renovations, or those genuinely on the market for rent or sale without success.

This initiative runs parallel to Paris's efforts to curb lucrative tourist rentals, which are also blamed for reducing housing availability in a city with some of the world's most expensive real estate. In April, the city council celebrated a 585,000-euro fine against a real estate company that had converted a social housing building into short-term tourist rentals.

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El objetivo es reintroducir en el mercado aproximadamente 20.000 viviendas vacías, incentivando a los propietarios a alquilarlas o venderlas en lugar de mantenerlas desocupadas