Paris City Council Doubles Vacant Property Tax to Ease Rental Market Pressure

The Paris City Council has voted to double the tax on vacant residential properties, increasing the rate from 20% to 40% of the rental value for properties empty for at least one year, and from 40% to 80% for those vacant for two years or more. The measure, announced on March 20, 2025, aims to discourage landlords from leaving units unoccupied and to increase the supply of rental housing in a market where demand far outstrips supply. Paris has one of the tightest rental markets in Europe, with vacancy rates below 3% and average rents among the highest in the EU. The policy is part of a broader push by Mayor Anne Hidalgo's administration to address housing affordability, which has become a central political issue ahead of the 2026 municipal elections. Critics argue the tax may lead to short-term rent spikes as landlords pass costs to tenants, while supporters say it will force property owners to either rent or sell, easing pressure on the market.

Global Impact

Economically, the tax increase is a targeted intervention in a specific urban market, unlikely to move national French GDP or inflation figures. Politically, it reinforces the left-leaning housing agenda in Paris and could influence similar policies in other global cities with housing crises, such as London, New York, or Berlin.