How will the new president affect Brits buying property in France?
Fran�ois Hollande has become the first Socialist French president for over 20 years. Early indicators are that his presidency will bring about clashes with German chancellor, Angela Merkel, who has driven through austerity measures throughout the eurozone in recent times. Hollande, meanwhile, favours a tax-and-spend programme to stimulate growth.
In terms of the impact on Brits buying in France, property expert Danny Silver, of The Villages Group, says: “It is important to remember that this election was simply a vote for the French presidency, not the government, so there will be no particular implication on the real estate market. It’s business as usual.
“The legal process (which has changed very little in 200 years) will remain the same with France continuing to be one of the safest nations in the world to own real estate according to the IMF, World Bank and US Federal Bank. The new presidency will not impact on many of the factors that affect the purchase of French real estate such as currency or the buying process, and with France consistently ranking as one of the most popular countries in which to live and with property prices remaining stable there is no need for potential British buyers to worry.”
Looking at the wider implications concerning aspects such as tax, Matthew Cameron, of Ashton KCJ, says: “President-elect Hollande has said that he intends to reduce inheritance tax allowances available to children. These allowances currently stand at around €160,000 per parent per child, although they could well be reduced to €100,000. As an example, if a UK resident man leaves a house in France worth €200,000 to his only child on his death, then under the current regime the inheritance tax burden would be around €6,300. Under the new regime, this legacy would involve an inheritance tax bill of more than €18,000. Stepchildren would not be affected by this new law – they still have to pay tax at 60% after an initial tax-free allowance of less than €2,000. It is also likely that the threshold for wealth tax will be reduced, from €1,300,000 to around €800,000.
“The above would depend upon new legislation that would need to pass through the French parliament, so the results of the upcoming parliamentary elections is now most important for all French property owners, resident or not.”
Election years are traditionally slow for the French property market. Yet the recent noises coming from the market have been defiantly optimistic.
Currency specialist, HiFX, reports that France still rules as the dream property hotspot for 2012. Its latest Property Hotspots Report shows that France tops the list, with over a third (35%) of buyers looking to own a property across the Channel.
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These sentiments are echoed in new research from another currency specialist, CaxtonFX. They state that not only is British confidence in buying homes abroad on the up, but France is still the firm favourite, with an increase in purchases of 63% in the period 2010-2011. Managing director James Hickman talks about the perception of France as a safe haven for property buyers, an assessment borne out by the fact that French property has held its value relatively well in recent months. James goes on to say: “For people thinking about making a purchase in Europe, the single currency is relatively weak at the moment, and there are bargains to be snapped up.”