Paris Mayor Cracks Down on Second Properties

French PropertyForeign property owners with holiday lets in Paris are being warned to ensure that they are fully complaint with local laws as flouting the rules could lead to a fine of up to 25,000 Euro a day and a criminal record.

The Office of the Mayor of Paris has stringent rules that now demands that property investors who let out their Parisian properties pay for affordable housing equal in size and similar in location and style to that which they are renting out. These rules have led many buy-to-letters to keep their buy-to-let propeties unofficial – any holiday property which is let out should be given government permission ahead of the start of the property’s lettings.

Many foreign property investors have recently become interested in Paris as a potential investment destination as prices in central arrondissements have doubled in the past five years and property was cheap compared to other capital cities. Rental yields tend to be good with most netting around 5%, although some owners have reported yields of up to 9% on their portfolio.

It is unsurprisng that Paris remains a popular choice with it’s beautiful architectural charm. Many Paris properties have immense wooden doors opening onto stone courtyards, with winding stairways and tiled passageways, and these give off an air of romance and mystery. There is very little in the way of new building going on in Paris as space for new projects is at a premium, however some derelict sites on the edge of the city are being torn down to make way for modern apartment blocks. However older properties still drive the market thanks to their quaint charm and history.

Many property owners – both local and foreign – have tended to ignore the requirement to register the change of use on their properties and the issue was rarely enforced unless local residents compalinged. However the new rules, which follow concernts about the affordability of properties in locations which are favoured by the wealthy, and the scale of the penalties, has worried many property investors.

To get around the rules, some investors are trying to think out of the box – some properties are now empty, no longer rented to anyone, foreign or local; other property investors are looking to set up co-operatives to provide social housing nearby; some property investors are looking into renting their property investments to students, which would satisfy the affordable housing rules.

So in short, if you own a holiday let in Paris, it’s time to revisit your property and decide what you want to do with it – ensure that you are fully compliant with local laws, or perhaps try another option and see whether the enforcements really do come into practice or not.

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