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Paris To Tax Empty Offices At 20-40% Of Rental Value; Price Crash On The Way

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Mish 9/7/14

'The ideas from France get nuttier and nuttier as time goes by. Via translation from Les Echos, please consider Paris Will Tax Empty Offices.

The Paris City Council approved Tuesday a tax on commercial vacant properties. The main objective according to city planners is to encourage the conversion of empty offices into housing, not to "create a new tax". The city plans to tax owners of vacant commercial premises at 20% of the rental value of the first year, 30% the second, 40% the third year, from 1 January 2015.


Paris has 18 million square meters of office space, of which 6-7% is vacant, according to the deputy in charge of Housing Ian Brossat. The mayor of Paris, Anne Hidalgo, pledged during his campaign to get at least 200,000 square meters transformation of offices into housing during his term.

Price Crash On the Way

With this ruling, a price crash in office space lease terms as well as property values is a given. And if a mad dash for the exits ensues (as is highly likely), expect downward price pressures on rental values and condo prices as well.

Look on the bright side. Deflation is a good thing (but try telling any bureaucrats anywhere on the planet that story).'

If they did this in most cities in the Midlands,the result would be disastrous for RBS.

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Isn't this exactly what a Land Value Tax is. Forces property owners to use or sell rather than sit and hoard.

Mish is a shill t*sser.

agreed. I like reading Mish but he really has a blind spot when it comes to LVT.

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Para 1. Nutty idea.

Para 2. Will lead to deflation.

Para 3. Deflation is good.

This does not conform to a logical structure that I recognise.

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Are you sure they're not just plans, because such ideas are dreamt up all the time in Paris, but not many come to fruition. There's also a motion that may come to pass this year, that in Paris (and some other French cities), the state will determine the rental value of property and landlords will not be able to deviate from their rental charges by more than 15% or so of the valuation. Won't stop all the illegals from living in basements though.

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The French may well have some nutty plans but at least they have a State that attempts to run things in the interests of the people, and not a handful of rentier extracting scum like the UK

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There's plenty to criticise in France, but at the same time 35 hour working weeks are still the norm, and most people leave on time without anyone blinking an eyelid. There's a lot more orientation towards family, and kids and teenagers generally listen and have more respect towards adults. Outside the main cities, most shops close for a couple of hours at lunch, and don't open on Monday's or Sunday's. 24 hour services are convenient, but I'd rather be 30 years backwards, somewhere that doesn't put profit above lifestyle. There's also far less nannying by the state, virtually no CCTV, no major house shortage issues and houses to suit the budgets of almost everyone. Heck they even brought a corrupt former president into custody!

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There's plenty to criticise in France, but at the same time 35 hour working weeks are still the norm, and most people leave on time without anyone blinking an eyelid. There's a lot more orientation towards family, and kids and teenagers generally listen and have more respect towards adults. Outside the main cities, most shops close for a couple of hours at lunch, and don't open on Monday's or Sunday's. 24 hour services are convenient, but I'd rather be 30 years backwards, somewhere that doesn't put profit above lifestyle. There's also far less nannying by the state, virtually no CCTV, no major house shortage issues and houses to suit the budgets of almost everyone. Heck they even brought a corrupt former president into custody!

+1

Though they do have big problems in the inner cities.

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Generally speaking it's more restricted to certain dodgy suburbs of cities. I lived in Paris for a number of years, and travelled all times of the day and night from place to place, and the only problem I ever witnessed were Romanian kids wrestling a camera from a Japanese tourist. Never encountered many drunks either, though that's probably because they can't afford the extortionate prices in the bars, so drink in private.

Edited by You Ain't Seen Nothing Yet

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There's plenty to criticise in France, but at the same time 35 hour working weeks are still the norm, and most people leave on time without anyone blinking an eyelid. There's a lot more orientation towards family, and kids and teenagers generally listen and have more respect towards adults. Outside the main cities, most shops close for a couple of hours at lunch, and don't open on Monday's or Sunday's. 24 hour services are convenient, but I'd rather be 30 years backwards, somewhere that doesn't put profit above lifestyle. There's also far less nannying by the state, virtually no CCTV, no major house shortage issues and houses to suit the budgets of almost everyone. Heck they even brought a corrupt former president into custody!

Often think that France has managed to strike the right balance in lots of areas we haven't. As for the topic, there needs to be some flexibility in office space (and housing) which will inevitably mean some not in use at any particular time. Convert it all to housing then a start-up business looking for office space is going to find things hard.

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