Research article

Paris in a global context

world city

Moving up the ranking of top-tier world cities, Paris looks increasingly attractive thanks to tax reforms

A global ranking

Despite enjoying a strong international standing, the Paris residential market remains mainly domestic. This is a key reason why prime residential prices are well below those of its global peers. The city ranks 7th in our league table of top-tier global cities, having overtaken San Francisco in the past 12 months. Prime prices on a square-metre basis stand 66% below prime Hong Kong and 19% below Prime London, in euro terms.

Prime league of top-tier global cities

Prime league of top-tier global cities Prime prices in 2008 and 2018
Source: Savills World Research

How has tax reform impacted the market?

The wealth tax has been replaced by a new tax, L’impôt sur la Fortune Immobilière (IFI), which applies to real-estate assets only. It covers real estate held directly by individuals, as well as shares in companies (regardless of legal status and localisation). The threshold remains unchanged at €1.3 million. All other aspects of the former wealth tax (eg taxes on financial assets) have been abolished. This has helped improve the attractiveness of the French tax regime for wealthy individuals.

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