It is time to gaze into the crystal ball as we approach the New Year. Where next for the property market in France? President Hollande has certainly stirred up a hornet's nest with his fiscal and tax policies changes.
For the wealthy, the tax changes have been far-reaching. High profile businessmen and celebrities (recently Gerald Depardieu has moved to the Belgian border) have been voting with their feet and relocating to countries with more friendly tax regimes.
Property Tax Changes
On the property front, France has seen new taxes approved by the Government. The new tax regarding rental income for overseas owners is being back dated to 01 January this year(2012) with the total tax liability on rental income increasing by 15.5% to 35.5%. Furthermore on property sales, the tax on property gains has increased to 34.5% from 19% for European Union residents. There is some tax taper relief for every year of ownership.
The French economy is bumping along with little growth and high unemployment so demand for property on the home front will be minimal.
All of these changes will have an impact on property prices. However, France is recognised for having the highest quality of life in Europe, unrivalled healthcare and education systems. People love the climate, landscapes, food, wine and sandy beaches. Nothing has changed on that front. So foreigners will still be looking to buy in France for a better lifestyle.
Demand in 2013
Will the demand from foreign investors and buyers prevent the market from stalling? A difficult question to answer. Rural property is likely to see less demand and it is almost inevitable that falls will be seen. In คอนโดมือสอง ราคาถูก prime locations such as Paris, major ski resorts and the Cote d'Azur, demand should be sufficient to keep the market ticking over. Property will have to be priced sensibly.
Our advice would be to negotiate aggressively on price - people will need to sell, and it should be a buyer's market.
Recovery in 2013?
There are signs that the EU is getting to grips with its financial issues that have plagued the region for many years. Recovery may be under way but the path is likely to be slow and rocky. Perhaps towards the end of 2013 the property market will begin to recover, as EU economies begin to grow once again. As with any investment timing is crucial. Perhaps the seeds of recovery are in place, and now is the time to invest in France. Leave it too late, and the attractions of France will result in significant increases in property prices across France.
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