Paris Luxury Property Market Cools
Political instability and tax risks weigh on high-end housing
Paris’s luxury real estate market, which surged in 2025, has entered a cooling phase at the start of 2026. After a wave of demand from ultrahigh-net-worth individuals pushed transactions to record levels, political uncertainty, budget disputes and the prospect of a new wealth tax have begun to affect sentiment in the premium segment.
According to Barnes, which controls more than 25 percent of the Paris high-end market, luxury transactions rose by 22 percent in 2025, reaching their highest level in two decades. Properties priced above €1 million saw similar growth. The rebound followed two difficult years in 2023 and 2024, when higher interest rates and social unrest weighed on activity.
By late 2025, however, market dynamics shifted. Bloomberg reported that some individuals with net worth above $30 million have started considering selling French assets and relocating to other jurisdictions.
Wealth tax debate increases pressure
A proposal by economist Gabriel Zucman to introduce a 2 percent annual tax on fortunes exceeding €100 million has intensified concerns. Estimates suggest the measure could raise between $5 billion and $23.5 billion annually, though critics warn it may accelerate capital outflows.
France’s political landscape has remained fragmented since the snap elections of 2024, leaving the government without a stable parliamentary majority and struggling to pass budgets. This prolonged uncertainty has added volatility to investment decisions in the luxury property sector.
Potential destinations for wealthy residents include Italy, Switzerland, Luxembourg and Israel. Other competing cities for global capital include Milan, Dubai, Miami and Marbella, while Madrid ranked as the most sought-after destination for the ultra-wealthy in Barnes’s 2025 data.
Foreign buyers provide partial support
Despite the slowdown, Paris remains a globally recognised hub for prime real estate. Demand from foreign buyers, particularly Americans, has strengthened in early 2026, offering partial support to the market as European investors adopt a more cautious stance.
Prime districts and historic neighbourhoods continue to attract liquidity, though price momentum has moderated and buyers now hold stronger negotiating leverage.
Outlook for 2026
Paris’s ultra-prime segment is entering 2026 in a more restrained phase. Elevated taxation, potential fiscal tightening and political uncertainty limit speculative appetite.
As reported by experts at International Investment, Paris remains strategically important for capital preservation and portfolio diversification. However, investors should not expect rapid price appreciation or high rental yields. Tax exposure and regulatory pressure are pushing some capital toward lower-tax jurisdictions in Europe and the Middle East.