Property insiders welcome recent tax agreements
Tax agreements recently signed between France and Jersey, the Isle of Man and the British Virgin Islands are being welcomed by property insiders, as, once ratified by the individual parliaments, they will enable companies in these territories to avoid France’s punitive 3% annual tax on the gross value of any French property they own.
Developer Pierre & Vacances Group has seen a sharp rise in enquiries from the three offshore territories since the beginning of the year, as investors brace themselves to move once the tax is scrapped. "This seemingly small tax change is already big news in the investment community, with many private and corporate investors approaching us in advance of 1 January 2010", says Nick Leach, head of Pierre & Vacances property investments, UK & Ireland. "Suddenly, a big reason for not investing in France will be removed and the effect could be dramatic as more and more investors catch on."
David Anderson, a chartered tax adviser at London-based Sykes Anderson Solicitors, adds: "The removal of this tax on 1 January 2010 will have a very positive effect on the French property market, specifically investment property. From the New Year, a pool of capital in the Crown Dependencies will, for the first time, be able to flow, uninhibited, into France, with quality French property in good locations likely to do particularly well. So far, this looming tax change has passed largely under the radar, but even before its implementation it is already beginning to change investor mindsets. We have already exchanged contracts for several channel island investors on high value French properties, who are aware exclusive French properties will soon be harder to acquire as more wealthy buyers enter the market."