Vacant Homes Are A Global Epidemic (And Paris Is Fighting It With A 60% Tax)

Tyler Durden's picture

Via Stephen Punwasi of,

Runaway real estate speculation has been filling global capitals with vacant homes, creating artificial shortages in the world’s most sought after cities. The “shortage” has made local home owners wealthy overnight, but it comes at the cost of turning lively cities into empty shells. The city of Paris has decided it’s had enough, and implemented a tax in 2015. They didn’t quite get the results they wanted, so they’re now tripling the tax to 60%.

Paris’ Empty Home Problem

Paris has been trying to deal with vacant property owners for some time. Despite warnings that the city will have to take action, the number of vacant homes is growing. There’s now 107,000 vacant homes, representing 7.5% of all residential dwellings in the city according to France’s INSEE. Deputy Mayor Ian Brossat told Le Monde that 40,000 of those vacant homes aren’t even connected to the electrical grid.

Local developers have argued that more new construction is the solution. However Brossat argues “In a city as dense as Paris, where it is very difficult to build, controlling the occupancy of housing is strategic.” It appears the city believes they have 107,000 reasons more construction is not the solution.

Vacant Home Count

Total number of vacant homes, as reported by local governments.

Paris’ Vacant Tax Increase

Paris implemented a tax recently, but it didn’t quite produce the desired outcome. Starting in 2015 the city elected to tax vacant homes the equivalent of 20% of the fair market value of rent. On January 30 this year, they decided to triple that amount to 60%. The idea isn’t to punish those fortunate enough to own a second (or twelfth) home. They’re trying to discourage speculation and promote a healthy rental market.

Vacancy As A Percentage

Percent of homes vacant as a percentage of total homes as counted by local governments.

Empty Homes Across The World

Paris’ 107,000 empty homes might seem like a lot, but it’s becoming strangely normal around the world. New York City had a whopping 318,831 vacant units in 2015. It’s a hot topic in Sydney, where 118,499 vacant units were counted in 2013. Heck, London considers it a critical issue, and they “only” have 22,000 empty homes. There’s a massive numbers of vacant homes across the globe, but only Paris has decided to take aggressive action to tackle it.

Growing populations have barely put a dent in the vacant homes in  global real estate capitals. The amount of speculation has been scaling with demand, which is a curious paradox. This signifies an issue that’s more complex than just a basic supply and demand problem.

Is the Paris’ tax going too far, or not enough?

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Houses Depreciate's picture

Record high housing inventory in the US, demand at 20 year lows and falling and you didn't think prices were going to fall?

O-Nomics's picture

In Vancouver BC the empty home problem exacerbating the listing supply problem:


In Toronto, it's showing up as mania to buy anything with a front door:


Based on total inventory and total sales, 148% of listings were sold in February in Toronto.

We are buying a future that may not exist.


CRM114's picture

BC's corrupt Government (8 out of 10 of the ruling party's top donors are construction companies) have effectively banned owner builders, clearly in order to try and support the main constructors. A real estate crash is coming for a lot of reasons in a lot of places.

rf80412's picture

Overpriced urban real estate markets, in particular a handful of household name cities where people buy as investments in a vicious cycle of prices being endlessly bid up in order to buy into future appreciation.  Unfortunately, these markets tend to correspond to the world's economic powerhouses and cultural centers where lots and lots of people want very much to live in order to have access to jobs and to culture.  Meanwhile you can't give houses away across large swaths of First World countries, because there's little or no prospect of employment (especially for the college educated) and no yuppie/hipster amenities and social scene.

Houses Depreciate's picture

Yet prices are falling in those same urban real estate markets.

PoasterToaster's picture
PoasterToaster (not verified) Mar 7, 2017 12:43 PM

Another consequence of printing currency to keep the Ancien Regime in power.

Jubal Early's picture

The Swiss had a vacation house initiative several years back because of all the vacant ski chalets.  In the end it set a maximum vacancy rate (20% as I recall) and after that prohibits new construction.  Projects with planning approval as of a certain date, 2014 as I recall, were allowed to proceed.  It passed narrowly.

The cantons with cities (Geneva, Zurich, Lucern, Bern, Basel) forced this sucker on the rest of rural and mountainous Switzerland whose construction industry is facing a collapse in new construction.  Meanwhile I am certain above cities are all comfortably under 20% vacancy, so housing speculation is allowed to run amok in the cities but not in the country.

orangegeek's picture

Chi-coms have this retarded mentality that owning many homes creates wealth - nevermind the tax, maintenance, insurance and tenant management costs.


The chi-coms arrive, purchase and leave - if they die back in China, there's no way of knowing this.


China - 350% debt to GDP and climbing - their fucking yuan should be near worthless.

novictim's picture

>China - 350% debt to GDP

Realize that the actual debt is FAR FAR higher than what the official numbers suggest and that the underlying GDP is grossly overstated. 

China is a money pit of malinvestment and Ponzi-level lying.  It would not be a surprise to realize that the Debt to GDP ratio is more likely to be 8:1 or worse.

SubjectivObject's picture

The wealthy mine the economic assets, but there's only so many of them to go around.  

The rest of us cannot afford assets on their terms, so they sit empty.

TheVoicesInYourHead's picture

Money-launderers typically dont rent out their empty properties.

Houses Depreciate's picture

They're dead broke. It's all dumb borrowed money.

shovelhead's picture


Apparently they are rich enough to service a mortgage without getting a return.

Why not just burn money and save the time on paperwork?

scraping_by's picture

Most of the mortgages were securitized and sold to dumb money. The bank with their name on the house is just a middleman.

CRM114's picture

Because they would lose the entire capital if they left it in China, so anything but a total loss is still a profit, relatively speaking.

TeethVillage88s's picture

Federal Reserve is now US Largest Mortgage owner/holder.

Some might say money laundering, counterfeiting, False Representation by Ben Bernake might mean 'fraud' or 'wire fraud'... along with Hank Paulson... and others in TBTF who gave testimony.

Might be a lot of work to list and find all the names who could be fraudsters here.

barysenter's picture

Economic warfare is always undeclared. Silent weapons for quiet wars.

csmith's picture

"Is the Paris’ tax going too far, or not enough?"

Let's see...central banks print trillions, inflating real estate values - taxing entities then gouge the owners...all is good!!!

Temporalist's picture

I hear anecdotes of the $2-5mil market for homes being very soft.

GreatUncle's picture

When you apply a 60% tax, serves well to fleece the high end middle class actually got any money left.

Whereas the global elites, "who gives a fuck" put it on the QE bill.

Unless you limit the amount of assets you can own what you end up with and we have is a small band of elites owning everything and with confisication of wealth through the economic mechanism no way to remove it.


lesterbegood's picture

This video shows that there is no such thing as a bank loan.
All bank loans are a fraud.
It is illegal for them to loan money.
All mortgages are a fraud.
The sub-prime crisis was a fraud.
The federal debt is a fraud.
All government debt is a fraud.
These banksters are thieves.
All banks operate under Roman law under Roman Cult authority.

Dr. Engali's picture

Homes being priced out of the reach of the common person are another byproduct of NIRP and ZIRP. If they aren't going to kill the fed (let's get real they aren't) then they need to tax the crap out of land to kill the speculation. Force some pain on those people holding on to nonproductive land. Hat tip Dimeshowme..

Weirdly's picture

Sell your land bank and buy stocks!

bluskyes's picture

Something about perverse, unintended consequences, and government intervention comes to mind.

novictim's picture

Your English is pretty good!

U4 eee aaa's picture

A second home should not be a privilege until a first home is a right

WallHoo's picture

Rentiers refusing to cut the rent...Who would have thought?

Publicus's picture

Need to tax it at 100%.

Akhenaten II's picture

60% won't be enough. It will have to be really punitive to make the Chinese and uber wealthy disgorge.  Chinese prefer their property empty than to have 'dirty' renters live in it.  It will have to be 150 to 200% of fair market rent to start to make a dent.

Spungo's picture

This. The tax would work at 200% of fair market rent, but this would have major side effects. It means that having a rental property carries a real or perceived risk that is very large. The only way to adapt to that risk is to demand larger returns - only invest if the rental costs skyrocket. What I'm trying to say is that it would actually worsen housing shortages. 

Much of California has this problem. Places like San Francisco have a lot of rules against things like rent increases or what the landlord is allowed to do. Investors decide the risk is too great, so they refuse to invest. People living in SF who have a spare bedroom that could be rented out for an easy $1000/month refuse to do so because it could turn into a nightmare where they can't legally evict their shitbag tenant. The lack of rental properties causes a housing crisis, so the rental prices in SF are extremely high even though rent control is in place.

The more common way of saying this is to say that government policies often have results that are the polar opposite of what was intended. With that in mind, government policies should be mild and conservative. A policy that aggressively tries to save the entire world would end up bieng the one that destroys the entire world.

brooklinite8's picture

Or the landlord might just rent it for what he can get to avoid paying fines... 

novictim's picture

Agreed.  The Chinese Oligarchs are playing with money they did not personally earn.  It is the money of the peasants they coerce to work in their factories at slave wages. So the Ultra Wealthy Chinese will not mind the increased tax unless it is very, very high.  It is money for nothing as far as they see it.

pluto the dog's picture

crappola. most of the chinese money is being printed out of thin air - then converted into western currency. white people are really stupid!

dojufitz's picture

They are about to introduce the same tax in Melbourne Australia.....Melbourne is insane for home hasn't had a crash since 1987......that is a long enough time to make people feel it never happens.....$1,000,000 buys you a decent home here......

Sledge-hammer's picture
Sledge-hammer (not verified) Mar 7, 2017 4:14 PM

Maybe do not allow non-citizens to own homes there and other cities experiencing this effect.  I am pretty sure that there are few Parisians who own homes in China or the Middle East oil-producing states.  These seem to be the people buying these properties there and the USA also.  I am also pretty sure that these other countries do not protect one's property rights as diligently as non-Caucasian countries.  

Sledge-hammer's picture
Sledge-hammer (not verified) Sledge-hammer Mar 7, 2017 10:50 PM

Oops.  Meant to say "as diligently as Caucasian countries".

Vin's picture

Yep, more taxes are the answer.  Libtards never change.

CRM114's picture

They don't want to stop crime, they just want their cut.

Xena fobe's picture

RE speculation does need to be discouraged some how.  It creates monoploly like conditions.  This might not be an issue in other markets, but in residential real estate, it creates very harmful distortions.

are we there yet's picture

Wealthy Arabs keep empty Western luxury homes, while worthless criminal Arab refugees are dumped on western streets. Saudi Arabia has not taken in a single worthless Syrian or Libyan refugee, because they know their true worth.

cesar's picture

First they rigged the US election and now the Russians have rigged the world's real estate markets! Wow they are smart!

Maybe we all should just move to Russia?

artichoke's picture

107000 empty units in Paris turn the city into an "empty shell"?

Jerusalem Cats's picture

Jerusalem has the same problem. People only spend 2 weeks in their apartment and fly back to the State or Canada the rest of the year. Jerusalem has a Tax on vacent apartments.

Jerusalem Cats's picture

Jerusalem has the same problem. People only spend 2 weeks in their apartment and fly back to the State or Canada the rest of the year. Jerusalem has a Tax on vacent apartments.

ichan's picture

I don't like giving the gov't more money/taxes. But anyone that is rich is enough to have a extra property and have it empty not producing any income. Well they will be fine. Soak em. That should keep the gov't away from squeezing other sources. And just maybe they will put the houses on the market. More supply, prices should slow or god forbid come down a little.