New Data coming in for 2008 and 2009 shows that despite the difficult current climate, the French property market is continuing to strengthen under Sarkozy’s “real estate investor-friendly” Governance. Sarkozy’s laws which support broader home ownership have been a major driver. From the beginning of 2009, France has been able to offer its homeowners zero-interest loans of up to €30,000. The loi Bouvard pertaining to tourism property extends the original Loi Scellier (on unfurnished property) to sale and leasebacks so that residents can offset 25% of the cost of buying a residential property against their personal income tax up to a maximum of €75,000 on a €300,000 property.
These measures have helped to shore up the construction industry in France and keep both supply and demand steady when other property markets have crashed. Pierre & Vacances Property Investments (P&V), the European leader in sale and leaseback property investments, which defied international trends and sold €100 million worth of property in the last six months of 2008 sold a further €150 million in the first six weeks of the change of law in April.
Nick Leach, P&V Head of Business Development UK and Ireland says: “These laws have incentivised promoters to build again especially because the tax benefits apply for properties delivered between now and 2012.
“There has been a definite increase in supply and demand for French leaseback properties as confidence returns to re-boost the French property market ahead of other countries. Foreign investors benefit indirectly from the knowledge that France remains a safe and stable place to invest.”
Other advantages for foreign investors buying French leaseback properties are the VAT rebate, guaranteed rental income (currently around 4% net of all charges and running costs with P&V) and importantly the availability of attractive French mortgages up to 100% with interest rates as low as 2.6% . Rental income should be free of French income tax (as you can offset expenses, amortization, and mortgage interest) and free of French CGT after 15 years making it a compelling investment in one of the world’s most stable and solid property markets.
According to data from the EU based on national censuses, there were 133,000 British living permanently in France in 2005, making France second only to Spain, with 205,000 Britons. By 2008, the number in Spain had risen to 354,000. France does not have more recent data, but some estimates put the number now at closer to 200,000 — with as many second-home owners.
For further information, please contact:
Nicholas Leach
Pierre & Vacances Property Investments
00 44 (o) 207 471 4500
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Kerry Clark
Tideway Communications
020 8878 0787
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Source: Pierre & Vacances Property Investments