Government tries to kick start French property market by improving CGT exoneration period
President Hollande has confirmed that the exoneration period for
French property capital gains tax (CGT) will go down from 30 years to
22 years from September 1st 2013.
This was previously trailered and expected by the market but the big
news is that budget minister, Bernard Cazeneuve, also told the senate
that there will be a special temporary reduction to “aid the fluidity
of the property market” – this tax allowance of 25% is for one year
only and will apply to sales between September 1st 2013 and August
Commenting on this move to boost transaction numbers within the French
property market Trevor Leggett (Chief Executive of Leggett Immobilier)
“It’s clear that the government are determined to boost property sales
over the next 12 months. Last year France saw a 12% drop in house
sales down to 709,000 and this year we’ll see a further decrease.
President Hollande recognises the danger this presents to the wider
economy and has acted to halt the decline.
Whilst these changes have still to be ratified by parliament next
month I see this as a formality, although some of the detail still has
to be clarified. It was interesting that Mr Cazeneuve also promised
to lighten the social contributions that are currently levied on CGT.
Our in-house legal team will be following this closely and combing
through the fine print once the law is passed.
Over one in ten UK buyers of French property now purchase their homes
through Leggett Immobilier and I’m sure that they will be delighted
that President Hollande finally seems to accept that the property
market is the cornerstone of French foreign investment. We see this as
a big step forward for the Hollande government and we are expecting a
spike in sales from September onwards”.