France’s proposed tax hikes spark ‘exodus’ of wealthy

The latest estate agency figures have shown large numbers of France’s most well-heeled families selling up and moving to neighbouring countries.

Many are fleeing a proposed new higher tax rate of 75 per cent on all earnings over one million euros. (£780,000)

The previous top tax bracket of 41 per cent on earnings over 72,000 euros is also set to increase to 45 per cent.

Sotheby’s Realty, the estate agent arm of the British auction house, said its French offices sold more than 100 properties over 1.7 million euros between April and June this year – a marked increase on the same period in 2011.

Alexander Kraft, head of Sotheby’s Realty, France, said: “The result of the presidential election has had a real impact on our sales.

“Now a large number of wealthy French families are leaving the country as a direct result of the proposals of the new government.

“These properties are then bought up by foreign investors looking for a stable real estate market like France to invest in.

“It shows the high-end property market is holding up very well, even in these difficult times.”

Gilles Martin, a Swiss tax consultant, reported the same trend. “Since the socialists came to power in France, I have been deluged with inquiries from rich French people who would rather pay their tax in Switzerland,” he told Switzerland’s 20 Minutes newspaper.

A report earlier this year by London estate agents also showed France’s richest people were heading to Britain to escape new higher taxes.

Inquiries from wealthy French for London homes worth more than five million pounds soared by 30 per cent in the first three months of this year, UK estate agency statistics showed.

And interest in homes worth between one and five million rose by 11 per cent, it was found.

British estate agent Knight Frank said the tax plans had sent French interest in luxury London homes rocketing.

Liam Bailey, Knight Frank’s global head of residential research, said: “It is too early to see the impact of the proposed wealth taxes in France in terms of actual purchases in London.

“But there is strong evidence from our web search statistics.

Read more here.

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