Are the French "super rich" really going to up sticks?

There's a feeding frenzy amongst the UK media at the moment to see who can run the biggest headline about wealthy French bankers upping sticks and moving to London.

The Daily Telegraph seem to regurgitate the same story daily, this is today's effort entitled "High earners say au revoir to France".

Francois Hollande has come into power on the back of pledges to tax the wealthy and put an end to the austerity drive implemented by President Sarkozy.  It will be interesting to see how many of these pledges he will be able to keep.

For sure those French residents with earnings over €1m pa are worried.

However, whether there is really a "huge exodus" is not yet clear.  London agents looking for a bit of free PR are, of course, going to stoke the fire and make all kinds of claims. 

There are already around 400,000 French people living in London so it's hardly a new phenomenon and I remember ten years ago the Chesterton agents in South Kensington and Sloane Square talking about the high amount of interest from French buyers.

And why not?  London is a fabulous city with a huge variety of parks, restaurants, museums and some excellent schooling (if you can afford it).  If you want to earn big money there's no better place.

Time will tell of course but with the pound at around €1.25 now (and getting stronger) even the super rich had better make their mind up quick. 

Having lived and worked in London for 20 years before moving out to France I do have one piece of advice for anyone looking to move the other way though:

Don't forget to pack your umbrella :-)

www.cognacproperty.com

Proposed tax on French holiday homes

There's been quite a lot written & said about the proposed new tax on French holiday homes.

Last night I read a new "global briefing" from exclusive agents Knight Frank which was so good that I thought it was worth sharing.  You can read the full paper here.

In essence we have two forms of "council tax" in France, taxe fonciere and taxe d'habitation - both of which are calculated on a property's rental value.  Even when taken in combination these are usually well below the equivalent tax you would pay, for example, in the UK.

The proposed tax would equate to 20% of the valeur locative cadastrale (VLC) - a theoretical rental value of the property set by the local tax office - and would apply from January 2012 if approved by the French parliament this summer.

If you read the Knight Frank briefing paper you'll see that, even if approved, the new tax will have a relatively marginal effect.  They give an example of a tax of €280 pa on a property worth €700,000 (well, it is Knight Frank!).

Indeed, with new changes (already ratified) to the wealth tax then France is looking an increasingly tax efficient country to retire to.

It's nice to see that the chap from Knight Frank finishes with this, bullish, sentiment:

"With the anticipated weakening of the exchange rate now more likely than ever, we expect British buyers to return to the market".

I have always liked those nice folk at Knight Frank (even going back to when there was still a Mr Rutley)  - let's hope they're right with that final prediction.

PLEASE NOTE THAT THIS DAFT IDEA OF TAXING SECOND HOMES HAS NOW BEEN SCRAPPED - 20 JUNE 2011

www.cognacproperty.com