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Now's the time to buy and sell in France

If you are thinking of buying or selling a property in France, now is the time to do it. As with much of Europe, France had become victim to the financial crisis in 2008, which saw property prices across the country plummet to unprecedented low levels. With people in financial difficulty and the economy weak, property transactions were at an all time low and the market started to stagnate. In order to reduce France’s financial deficit, when President Hollande first came to power in 2012, he introduced tax increases for foreign-owned second homes. Tax on rental income was increased from 20% to 35.5% (in the form of a ‘social contribution’) and capital gains tax increased from 19% to 34.5% (also as a social contribution). The taxes were heavily criticised by many who felt that these increases would only further hinder the flagging property market and thereby have a negative affect on the economy as a whole. The critics’ fears appear to have been correct, and this year Hollande announced tax incentives to foreign second home owners to help stimulate the market. As of 1st September 2013, those who sell their second home (sign the deed of sale) before 31st August 2014 will be entitled to an additional 25% discount on their capital gains tax. Additionally, those who have owned the property for more than 22 years will have complete capital gains tax exemption from the 19% fee, and those who have owned the property for more than 30 years will also be exempt from the 15.5% ‘social contribution’. All of which could equate to huge savings. With these incentives in place, the hope is that more people will be encouraged to put their property up for sale, thus reviving an otherwise flat and slow moving market. With more properties available, more transactions should take place and thus more properties will come onto the market. And although the incentives are aimed at the sellers of property, the tax changes will of course affect those looking to buy. With more properties on the market, there will be a greater range of choice and more chance to negotiate a good deal on the price. Roddy Aris, Sales Manager for Winkworth International says: “This is a very positive step taken by the Francois Hollande’s socialist government. President Hollande has taken quite a beating in the national and international press over his stance on taxation since he came to power, most of it justified and this is a clear move to try to unstick and lubricate the French housing market. By offering such a generous carrot to would be vendors I have no doubt that the number of transactions will increase and this in turn will stimulate all sectors of the market. It’s a huge opportunity for would be vendors and may just be the catalyst that the market needs right now.” As such, if you were thinking of either buying or selling in France, now is definitely the time to do it. Not only will you benefit from the tax incentives, you are also likely to benefit from the strengthening and increasingly competitive market. Speak to our International Department on 020 7870 7181 and they will be able to give you excellent advice about all your property needs.

If you are thinking of buying or selling a property in France, now is the time to do it.

As with much of Europe, France had become victim to the financial crisis in 2008, which saw property prices across the country plummet to unprecedented low levels. With people in financial difficulty and the economy weak, property transactions were at an all time low and the market started to stagnate.

In order to reduce France’s financial deficit, when President Hollande first came to power in 2012, he introduced tax increases for foreign-owned second homes. Tax on rental income was increased from 20% to 35.5% (in the form of a ‘social contribution’) and capital gains tax increased from 19% to 34.5% (also as a social contribution). The taxes were heavily criticised by many who felt that these increases would only further hinder the flagging property market and thereby have a negative affect on the economy as a whole.

The critics’ fears appear to have been correct, and this year Hollande announced tax incentives to foreign second home owners to help stimulate the market. As of 1st September 2013, those who sell their second home (sign the deed of sale) before 31st August 2014 will be entitled to an additional 25% discount on their capital gains tax. Additionally, those who have owned the property for more than 22 years will have complete capital gains tax exemption from the 19% fee, and those who have owned the property for more than 30 years will also be exempt from the 15.5% ‘social contribution’. All of which could equate to huge savings.

With these incentives in place, the hope is that more people will be encouraged to put their property up for sale, thus reviving an otherwise flat and slow moving market. With more properties available, more transactions should take place and thus more properties will come onto the market. And although the incentives are aimed at the sellers of property, the tax changes will of course affect those looking to buy. With more properties on the market, there will be a greater range of choice and more chance to negotiate a good deal on the price.

Roddy Aris, Sales Manager for Winkworth International says: “This is a very positive step taken by the Francois Hollande’s socialist government. President Hollande has taken quite a beating in the national and international press over his stance on taxation since he came to power, most of it justified and this is a clear move to try to unstick and lubricate the French housing market. By offering such a generous carrot to would be vendors I have no doubt that the number of transactions will increase and this in turn will stimulate all sectors of the market. It’s a huge opportunity for would be vendors and may just be the catalyst that the market needs right now.”

As such, if you were thinking of either buying or selling in France, now is definitely the time to do it. Not only will you benefit from the tax incentives, you are also likely to benefit from the strengthening and increasingly competitive market. Speak to our International Department on 020 7870 7181 and they will be able to give you excellent advice about all your property needs.

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