Macron Effect Boosts Paris Property

When French president Emmanuel Macron was elected in May last year there was a lot of optimism that the appointment would help boost the Parisian property market.

It seems that optimism was well judged, as according to Databiens, the data analyst, properties in Paris sold during the final three months of last year achieved a price of €12,031 (£10,599) per square metre, which is 12.5 per cent more than the previous year and 25 per cent more than in 2014.

Furthermore, Knight Frank forecasts that prime property prices will rise a further 9 per cent this year – the highest prime increase in the world, with Hong Kong, Berlin and Sydney, where prices are expected to increase by 7 per cent, coming in second. In contrast, it forecasts just 0.5 per cent growth in prime areas of London.

Roddy Aris, an associate in Knight Frank’s French property team, said: ‘There are a number of reasons that the Parisian market is doing well, but first and foremost it is down to Macron.’

He continued: ‘Hollande caused a mass exodus of wealth from Paris to London and Brussels. Macron is the opposite to Hollande. He is young, entrepreneurial, statesman-like, business-friendly – and France is being seen as the go-to economy in Europe. Paris is taking over the mantle, from London, as the politically stable hub of Europe at a time when London is losing its shine, with Brexit and the uncertainty that has created.’

Since the election of Macron, the wealth tax has been replaced with a property wealth tax, which is only applied to equity in property and not to total assets, as had been the case with the wealth tax. There is also a 30 per cent discount on the value of a main residence.

A new flat tax rate of 30 per cent for income and capital gains has also been introduced. Over the next three years

Residence tax is being phased out over the next three years and will be abolished for all eligible households in 2020, although the tax will remain on second homes.

Inquiries about Parisian property have been steadily increasing since the appointment of macron, not least from British buyers looking to purchase before the UK leaves the European Union in March 2019.

It seems that many British overseas property investors want to experience the Macron effect for themselves.