TAX-CHANGES-SAVE-BUYERS-OF-FRENCH-PROPERTY-THOUSANDS

Tax changes save buyers of French property thousands

15.01.18

Changes to French Property Tax are set to have a positive impact on the already successful second home market.

Research from Enness Mortgage Brokers shows France is the most popular destination for second homes, and the company predicts 2018 is going to be even busier thanks to the implementation of the new wealth tax.

France is the most popular location for second property investment, with over €297million worth of loans arranged by international mortgage broker, Enness, in 2017,” comments Hugh Wade-Jones, Managing Director of Enness International. “In 2018, these investors may save thousands in tax as a result of the implementation of the new wealth tax – Impôt sur la fortune immoblière (IFI).”

The changes, announced by President Macron, mean there will be an upgrade to the existing Impôt de solidarité sur la fortune (ISF). This will see investors taxed solely on their real estate assets, rather than all financial assets, meaning all other wealth - such as securities, bank and financial investments - is exempt from this tax.

This news, which came into force at the start of this month, has been welcomed by investors of French property.

“On real estate assets worth €1.3million or more, a 0.5% tax is applied to the net value of property above €800,000. Therefore, the tax is only applicable to the amount of equity an investor has in the property,” explains Mr Wade-Jones.

“For example, if an investor owns a €1.3million property, and has €900,000 equity in it, they will pay 0.5% tax on the €100,000 above €800,000. IFI is fantastic news for investors of French property.”

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