SIZZLING PARIS

The historic monuments, romance, culture, and French cuisine gives that unforgettable sizzling touch that is only peculiar to the gem of France-Paris.

Text: Damilola Dimeji-Ajayi

Paris is a popular city in France being one of the most visited cities in the world. Attributed to her popularity is the presence of the Eiffel Tower and art repertoire which attracts lovers, tourists, and foreigners alike from around the world. Paris, the capital city of France, is attracting a great deal of interest from international investors at the luxury end of the market. With her recognition as the eighth most expensive city in the world, Savills’ recent Spotlight report stated – “opportunities are ripe with a prime real estate in prestigious Paris neighbourhoods, 32% cheaper than in London and 69% less than in Hong Kong.” Currently, while international buyers make up only 9% of the market, confidence in investment is growing and investors are preparing their move.

According to a report by Sotheby’s in 2015, Paris was placed among the top four destinations for luxury residential investment worldwide, with low-interest rates on French mortgages pointed out as one of the main attractions. Another appealing factor is the relatively stable market accounted for the city’s global reputation for cultural excellence. The next few years are going to witness an influx of international investors in Paris. In the words of Henry Miller, to know Paris is to know a great deal.

What is Paris Current Real Estate Market Update?

Paris’ real estate is in its prime with its sizzling market, taking a cue from new sales records and surging prices in 2017. The Notaires released a report which confirmed sustained price rise across the Île-de-France region between July 2016 and July 2017, where apartments have increased by 5.2% and houses by 2.2% on average. A significant proportion of these accelerated growths has been attributed to Paris, as the average price of old apartments in the capital rose by 6.8% in one year.

According to the recent data from Notaires, annual price rise has been widespread across the capital, with the initial 8 arrondissements now exceeding €10,000 per m² on average. This growth has been highest in the 2nd arrondissement (+ 13.3%) and particularly marked in the 6th and 7th, where many Paris properties are located and where average prices now surpass €12,000 per m². In spite of the fact that the price gap between the cheapest and most expensive areas in the Île de France region continues to widen as a result of this acceleration in the capital, the market as a whole remains dynamic. Paris’ dynamic market conditions, attractive interest rates, and competition have prompted an increase in the number of flash housing sales. From a recent report by Le Point, housing in the capital is now typically on the market for less than a week before receiving an offer, and buyers are offering the full asking price.

“opportunities are ripe with a prime real estate in prestigious Paris neighbourhoods, 32% cheaper than in London and 69% less than in Hong Kong.”

What Cost is Associated with Purchasing a Property in Paris?

The costs related to buying a property are opening cost, closing cost, transaction cost, and standard expenses.

Opening and Closing Cost

On the opening cost, payments must go through your Notaire and should not be paid to the seller directly. This is one of your Notaire’s responsibility who will deposit the funds in an official bank account until required. On closing cost, you will be paying the remaining amount and this is generally between 90% to 95% of the cost of the apartment.

Transaction Costs

Agent’s commission (if an agent is involved), legal cost, and expenses as well as the transfer of property cost will be paid by you. You will find this stated in the purchase price and these costs add up to approximately 7.5% of the value of the apartment. If you’re taking out a mortgage, the arrangement fee is about 1%. The following are the legal costs that apply to every buyer; whether French or foreign.

Land Registry Taxes are Also Known as TPF

Taxes de Publicité Foncière – This is approximately 5.1% of the cost of the apartment.

Miscellaneous Expenses

It includes searching and examining the deed of sale, usually less than €700.

The Notaire’s Fee

This is calculated with respect to the value of the property and size of the mortgage. For properties over €16,800, the fees are 0.825% and are subject to
19.6% VAT (Value Added Tax).

Standard Expenses

There is always a difference in taxes for residents and non-residents. Non-residents are classified on the basis that, they spend less than 184 days a year in France. For recurring bills, try to set up a direct debit from your French bank account which may entail:

• Utilities such as electricity, water, gas, and phone
• Capital Asset Taxes – you must declare all capital assets in France; and, if necessary, pay tax on those assets.
• Local real estate taxes also known as impôts locaux
• Property management fees
• Income Taxes – you must declare income and pay taxes on any income derived from activities in France.

Pleasures to experience in Paris?

There are so many French cuisines to gratify one’s appetite in the city of Paris. Some of these must-have foods include;

• Croissants: No one can make a croissant au beurre like the French.
• Chocolate: There are so many delicious chocolates to be found in Paris.
• Macarons: The delicate tasteful pastry is a must-have in Paris.
• Baguette: Paris has the highest density of top-quality, mouthwatering artisanal baguettes.
• Soupe à l’Oignon Gratinée (Onion Soup): This soup is one of the pleasures to enjoy in Paris.

Featured in Prestige Magazine Issue 2. Vol. 3 2018