A new President, a change for France
By Florence Richards - 15/05/2012 01:07 PM
The result of the socialist François Hollande’s appointment as the new President of the Republic of France could have a significant impact on French property owners and those looking to buy in the near future.
Hollande’s manifesto was made up of 60 measures for France, with proposals including a stronger move towards equality between men and women, a reduction in the retirement age, the creation of 60,000 more jobs in education, and the right to marry to become available for same sex couples. It also included important measures to make fiscal change.
His win is likely to see a move away from austerity in France, with forthcoming legislative changes predicted to lead to an increase in the highest rate of income tax, increasing wealth tax and changes to inheritance tax.
Concerning income tax, taxpayers earning over €150,000 could see a hike in their highest rate of income tax rising from 41% to 45%, possibly even50%. Taxpayers with income of €1 million or more could see a portion of their income taxed at 75%. Income tax reliefs, already restricted by the previous government to a maximum of about €14,000, could be capped at an even lower overall amount of €10,000 by Mr Hollande. Amongst the other significant measures announced by Mr Hollande is the abolition of the current option for taxation of dividends to the 25% withholding tax and, consequently, their automatic taxation to income tax.
The threshold for wealth tax, after having gone up to €1.3million last year, is announced to be revised downwards again to come back to the threshold of prior to 2011, that is €800,000. Likewise, the current rates of 0.25% (for taxable estates between €1.3 million and €3 million) and 0.5% (estates of €3 million and above) are to be replaced by the old rates from 2010, ranging from 0.55% to 1.8%. These new thresholds and rates may even apply from 2012 for estates of €3 millions or more, as the new government may postpone the date of payment of wealth tax for the current year until September 2012. This measure may raise up to €2.3 billion from 2012. Another old rule that may be revived is the rule of limitation of all taxes paid by the taxpayer to 85% of his/her overall income.
In 2007 the then President Nicolas Sarkozy introduced significant reforms to French inheritance tax, with the introduction of a full spouse exemption on transfer between spouses on death, and a threefold increase in the nil rate band allowance for children on inheriting from a parent (from €50,000 to €150,000). In his manifesto François Hollande suggested that the spouse exemption would remain, but the nil rate band allowance for children would be reduced again, possibly to €100,000. Also, the delay between each gift to children free of Inheritance tax up to the nil rate band threshold, currently set at 10 years, could be increased to 15 years. These announcements have already triggered a surge of gifts from parents to children or grand-children in order to take advantage of the current more generous nil rate band allowance.
Any future tax changes will add to the line of recent changes, which include a reform of the capital gains tax rules. Previously a property owner (secondary residence) could be exempt from French capital gains tax after ownership of 15 years but since February 2012 the exempt period was extended to 30 years. Mr Hollande has declared his intention to revert to the previous more generous capital gains tax rules as early as next August/September. Estate agents expect a significant impact of this second forthcoming capital gains tax reform in the same year to boost a rather apathetic property market.
The rise of François Hollande is being announced as a defeat for austerity. If the pound remains strong against the Euro this can mark an era of buying power for the British in France. All eyes will be on France – and indeed Europe – over the coming months to see what impact the new President will have not only on France’s economy and tax system but also within the Eurozone.
For those people who own assets in France, they will be concerned to see what changes might be made, in particular to French taxes. We will get the first signs, probably as soon as when the new National Assembly has been elected and the new Government definitively formed in June 2012, with further announcements to be made and reforms with immediate effect.
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The Euro Crisis (first published by www.NormandyinSite.com 25/4/2012)
Global economic news seems to have been dominated by one subject over the last few months, the ongoing debt crisis within the Eurozone. Understandably, this has caused many individuals to raise questions about their own position, and in particular with their investments.
Here we won’t go into detail on what has caused the problems and what is being done to resolve them, as many column inches have already been devoted to these subjects. Instead what we aim to do is to discuss the questions we have most frequently been asked.
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S&P report: French banks can withstand a falling housing market
(The following statement was released by the rating agency) and published in an article by Reuters and spotted by Global Edge.
April 24th 2012 -
OVERVIEW
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Euro Uncertainty Continues to Dominate the Euro
The European nations have had a troubled year. The Greek financial crisis, combined with problems throughout Spain, Portugal, Italy & Ireland, has resulted in volatile currency movements. This has made the currency markets extremely unpredictable and therefore anyone wishing to transfer funds between currencies would be advised to speak to a currency specialist.
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UK property asking prices jump 2.9% to all-time record high
Monday 16th April 2012
An interview with Miles Shipside, Director of Rightmove, published by Estate Agent Today -
Asking prices for property have climbed to an all-time record high. The Rightmove portal reported this morning an astonishing 2.9% monthly rise in asking prices for properties new to the market over the last month, bringing the average asking price to a record £243,737. The value is miles apart from actual selling prices recorded by the Land Registry and from mortgage approvals data.
Halifax, for example, is quoting £163,803 as its current sales price.
The previous record asking price was last set nearly four years ago in May 2008. However, today’s Rightmove price exceeds that by 0.5%.
Whether hopeful sellers and their agents will actually achieve anywhere near what they want is open to question – especially outside London.
Today’s Rightmove report makes it clear that it is London asking prices that have boosted the national picture. Rightmove itself says London prices have acted as a crutch.
Asking prices in London have soared 14.9% since the last national peak in May 2008, and now stand at £464,944 compared with the previous peak of £455,159.
But average asking prices in the rest of the country have actually fallen by 4.3% over the same period. Even outside London it is a patchy regional picture and asking prices in the South-East and East Anglia are today respectively 0.3% and 1.1% off their old record highs, but in some regions (the Midlands for example), prices are still 10% below peak. In the South-West, however, asking prices are now averaging £270,735 – ahead of the previous peak of £264,608.
Rightmove also insists that the new national record should be compared with retail price inflation. This stands at 11.5% since May 2008, meaning that national average asking prices for property are down in real terms by 9.9% over the same period. Rightmove says that had property asking prices kept up with inflation, they would now be at £270,459 rather than £243,737.
The rate of the monthly rise is also interesting: at 2.9%, it is the highest since April 2007, five months before the run on Northern Rock. Miles Shipside, director of Rightmove, said: “From a national perspective, it has taken four years for new sellers to pitch their asking prices above their previous record. However, this is not a universal signal of a housing market recovery. “The richest seams of housing market activity are concentrated around those with access to cash and finance, with a strong bias to the South and London in particular. Even within regions there are micro-market hotspots where demand from those that can buy and the confidence and momentum it engenders are helping to push asking prices to new record highs.”
“It’s a somewhat perverse state of affairs for many of the mass-market not deemed as mortgage-worthy by the lenders that, at a time when many aspiring buyers are excluded, the average price of property coming to the market is at an all-time high.” He added: “Fresh property stock is a bit scarcer this April compared to last, and this is a key factor in providing a price floor for spring prices to springboard from. This is the strongest price-bounce Rightmove has ever recorded for the first four months of the year.”
French Nuclear Power Plants
Google maps has produced a map to locate the nearest nuclear power plant to a village. Once you have found a property to buy click here to check how close it is to the nearest nuclear power plant.
One in five households renting by 2016, say Savills and Rightmove
Thursday 5th April 2012
A report from Letting Agent Today says
“The number of people renting homes in the private sector has nearly doubled in the last decade, jumping from 2.5 million in 2002 to 4.8 million today.
A new report from estate agency Savills and the property portal Rightmove, ‘Rental Britain’, predicts that one in five households could be in private rental accommodation by 2016.
That would require an additional 1.1 million rental homes.
The report forecasts that a £200bn investment will be needed, but says that only £50bn of this is expected to come from buy-to let-funding.
It says the gap would be filled by institutional investment in new-build rental accommodation, but the report says that this needs to be recognised by the planning system.
The report says that a shortage in supply is making certain areas unaffordable, with rent rises averaging 5.2% across Britain in 2011.
In London, private renting already accounts for 27% of all homes (900,000) having overtaken social renting in 2010, which now accounts for 24% of tenure (783,000 homes).
The report estimates that last year, Britons paid around £48bn in rent to private landlords, and this is expected to rise to £70bn within five years.
Lucian Cook, director of Savills residential research, said: “Meeting the growing demand for private renting and the changing profile of tenant demand are perhaps the greatest challenges facing both the housing industry and policy makers.
“The dynamics of supply and demand make a great case for investment in this sector, and rising rents and lower capital values have begun to attract private investors back into the market. Investment returns relative to other asset classes will dictate the pace of investor entry to this sector.”
Rightmove overtakes BBC in Top Ten portals list – article published by EstateAgentToday.co.uk
Rightmove overtakes BBC in Top Ten portals list |
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Monday 20th February 2012
Rightmove, which is due to announce its results on Friday after a 71% net profit margin last year, has announced record traffic in January,
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French Property Prices.
In an article by François Alexandre for LaVieImmo.com it was reported that property prices continued to fall in January 2012. On average they have descended to the same levels as the beginning of last year. According to figures from SeLoger,LaVieImmo.com and JDD prices dropped by 0.85% in January which negates the 0,41% rise in December 2011. However these figures are based on asking prices not achieved sales prices.
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