New taxes hit prices of luxury homes in ParisAfter steady prices rises over the last two years, luxury house prices in Paris fell by 3.4 per cent in the first six months of 2012. Experts attribute the falls to proposed tax rises, announced after Francois Hollande became the country’s prime minister early in 2012.
Figure from international estate agent Savills showed that the decline in Paris bucked a rising trend in other major cities. Keep reading to learn more.
Prices in Paris fall as wealthy homeowners flee to avoid taxes
Lower demand for luxury homes in Paris contributed to the 3.4 per cent fall in values, according to the Savills report on major cities. The decline in Paris came as prices rose in London by 2.8 per cent and in New York by 1.1 per cent.
"Paris is the biggest loser of 2012," Savills said. "Further price falls now seem unavoidable in the French capital, and London is the potential beneficiary as international money seeks an alternative haven within the geography of Europe, but outside the euro zone.”
The new French Prime Minister, Francois Hollande, has already scrapped tax breaks for high earners and is considering a 75 per cent income tax rate for the country’s super rich. Many rich Parisians have therefore ‘fled’ the country to avoid higher taxes, leading to reduced demand for upmarket homes.
In April, estate agent Knight Frank reported that online enquiries from France for expensive homes in London had risen by 19 per cent year-on-year.
Savills research also reveals world’s most expensive apartment
The Savills research on major cities also revealed that the world's most expensive flat per square foot was bought by Russian fertiliser tycoon Dmitry Rybolovlev last December. The apartment was bought as a base for his student daughter at a price of $88 million (£54.9 million), or about $13,000 per square foot.
The 6,700 square-foot penthouse is in 15 Central Park West and Savills attributed the high price to the city's lack of new-build luxury apartments.