Hugh Wade-Jones, Managing Director of Enness International, talks about the new tax changes across the channel that will ensure that France remains one of the top locations for UK property investors to keep an eye on in 2018.
Hugh comments: “France is the most popular location for second property investment, with over €297million worth of loans arranged by international mortgage broker, Enness, in 2017.
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).
President Macron has announced that the new wealth tax – an upgrade to the existing Impôt de solidarité sur la fortune (ISF) – 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 – great news for investors of French property.
From 1st January 2018, IFI will come into effect, and will be calculated as follows:
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.
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.”