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).
Mike “Mish” Shedlock