A new legislative proposal in France, spearheaded by Senator Ian Brossat and Deputy Mayor Jacques Baudrier, aims to stem the housing crisis in high-demand urban areas by curbing the acquisition of secondary residences and increasing property transfer taxes on high-value properties.
Limiting secondary residences in high-demand areas
The proposed law would grant local authorities the power to restrict new secondary residence purchases in “tense” housing markets, such as Paris. Current secondary residences would remain unaffected, but new buyers looking to acquire second homes in cities already experiencing severe housing shortages may soon face restrictions.
“This proposal does not concern existing secondary residences, but new ones,” explains Baudrier. “For example, if you live in Bordeaux and want to buy a secondary residence in Paris, in a tense area like the 7th or 8th arrondissement, you will not be able to.”
Tackling housing shortages and urban decline
The proposal emerges against a backdrop of alarming demographic shifts. Paris, for instance, has reportedly lost around 8,000 primary residences per year, with the number of homes occupied as primary residences falling from 430,000 in 2011 to just 350,000 today.
Brossat underscores the need for intervention: “The objective of this proposed law is not to prohibit secondary residences but to allow their regulation when their proliferation threatens the balance of the territories.”
Higher property taxes to fund renovation
Another key element of the proposal is an increase in property transfer taxes (often misnamed as “notaire’s fees”) for expensive properties, particularly those exceeding €12,000 per square metre in cities like Paris. The additional revenue would bolster the budget of the Agence Nationale de l’Habitat (Anah), ensuring stable funding for home renovation schemes following recent cuts to MaPrimeRénov’, a state-funded renovation grant program.
Baudrier emphasises: “We must get out of these MaPrimeRénov’ cuts. These stop-and-go measures are terrible for renovation. Anah must have dedicated revenues.”
Balancing property rights and housing needs
Acknowledging the delicate balance between property rights and housing accessibility, supporters of the legislation cite international precedents, such as Belgium, where transfer tax rates are lower for primary residences than for secondary homes.
Baudrier notes: “A rate that is found in the highest transfer taxes in Belgium: 4% for a primary residence and 12.5% for a secondary residence in the Walloon region.”
Furthermore, proponents stress that the law allows for local adaptation, recognising that housing conditions vary widely across regions. “Aware of the diversity of local realities, this initiative does not claim to impose a uniform solution throughout the territory,” Brossat states.
Potential impact and challenges
While the proposal aims to address the housing shortage, it could lead to several unintended consequences, including a possible cooling of the property market in high-value locations. Legal opposition is also expected, particularly from stakeholders advocating for unrestricted property rights.
On the positive side, if implemented effectively, the measure could enhance housing availability for residents while ensuring sustainable funding for renovation projects. However, critics argue that enforcement and administrative complexity could pose significant hurdles.
