Paris Property Prices and Taxes on the Rise

TAXES ON THE RISE FOR PURCHASERS

Taxes on property purchases and sales are going up as of January 1, 2016. Surprise, surprise.

Notarial taxes (not their fees, set in 1978) on purchases made in Paris, based on a decision made November 23rd, will increase 13.3%.

For example:

The cost of acquisition of a resale apartment in Paris: €300,000

Before the increase:
Amount of taxes and other contributions: €16,160
Notarial fees: €3,800             
Total: €19,960

After the increase:
Amount of taxes and other contributions: €18,310
Price of notaries unchanged: €3,800             
Total: €22,110

If you are in the process of a purchase, then see what you can do to close prior to year end!

THIRD QUARTER PARIS PROPERTY PRICE REPORT: PRICES AND SALES UP!

As throughout the Ile-de-France, there was an upturn in activity in Paris recorded between July and October 2015, accompanied by tension on price.

1) In Paris, the price per square meter rose again above 8,000 euros/m²

In the capital, prices have increased slightly over the last three months. The price per square meter annually once again crossed the 8,000 euro bar (8,020 euros in the third quarter), having lost the bar about a year ago. The quarterly price increase is 1.7%. However, despite the rise in recent months, year over year, there has been a price decline of -0.9.

2) Four arrondissements exceeded 11,000 euros/m²

The 1st, 4th, 6th and 7th arrondissements have prices per square meter greater than 11,000 euros, compared to only two districts in the previous quarter. Five districts recorded 10,000 euros/m² or more. The 19th and 20th are still below the 7,000 euros/m².

3) Significant price differences between the arrondissements

The most expensive district of Paris is still the 6th with a price of 11,590 euros/m2. The cheapest is still the 19th with 6,550 euros/m². In one year the districts that have seen their prices increase are the 1st and 2nd (+ 10.4% and + 10.8% increase since third quarter 2014). Conversely, prices fell by 6.1% year over year in the 13th and 5.3% in the 16th.

4) Over 8,000 euros/m² price difference between the districts of Paris

The Champs Elysées (8th) is the most expensive neighborhood (14,530 euros/m²), followed by Notre Dame (4th) with 13,380 euros/m², Odéon (6th) with 12,840 euros/m² and Monnaie (6th) with 12,550 euros/m². Pont de Flandre (19th) is the least expensive part of the capital 6,030 euros/m². Next least expensive is La Goutte-d’Or in the 18th (6,060 euros/m²), Amérique (19) to 6180 euros/m² and La Chapelle (6,360 euros/m²).

In the Champs-Elysées, the price per square meter increased by over 40% in five years, while at the Sorbonne, it is slightly lower than that recorded five years earlier.

Note: the most expensive sale in the third quarter was for an apartment in the 7th district (St. Thomas Aquinas district) which sold for 30,100 euros/m².

5) Stable prices in Paris in the coming months

Leading indicators of the Paris notaries show a stagnation of prices in the coming months in Paris: on the horizon for January 2016, the price per square meter of an apartment should stabilize around 8,000 euros (8,030 euros/m² ).    

6) A vibrant Parisian market

The capital market experienced a sharp increase in activity with more than 9,600 sales signed in third quarter 2015, an increase of 22% compared to the third quarter of 2014. Not since in 2007 did we see a third quarter as strong in Paris. However, the sales volume remains less than 5% observed during the peak period (1999-2007).   

7) How will the Paris market evolve by January 2016?

The elements that supported the activity could be maintained in the coming months. The year 2015 should thus finish better than it started with a respectable level of activity.

What effect could the terrorist threat have to the Paris real estate?

The attacks of November 13th will raise short-term cancellation of certain projects in the capital, but also consolidates real estate as a traditional refuge in times of crisis.

The first signs of improvement in economic conditions recorded in 2015 need to be confirmed. They must also achieve a tangible improvement in the financial situation of Paris households (falling unemployment and rising incomes). The legal environment (rent control in Paris) and tax increases still hinders the mobilization of investors. The market remains more than ever dependent on interest rates and quick and easy access to housing loans. In this fragile and uncertain context, the saneness of price, even if it remains at high levels in the capital, confidence in the market will be key.

See the video by the Chambre de Notaires:

And you can download the full report (in French).

A bientôt,

Adrian Leeds
Editor, French Property Insider

(in Nice, by Michael Honegger)

Email: [email protected]

 

 

 

 

P.S. Tiny House World has moved our Paris episode to Saturday, December 5th. Don’t miss it!