The French government has announced a change in the capital gains tax system on second home sales in a bid to boost the French property market.
The taper relief system is to be changed so that from 2014 the required time of ownerships before a property is completely exempt from capital gains tax will be 22 years, down from the 30 year system which was ratified in September 2012.
Nicholas Leach, Partner at Athena Advisors, commented: ‘This could be considered as a bit of a u-turn by the government, reverting to a system which is similar to that of when Sarkozy was in power.
‘The changes in taxation were part of the reason why French home sales dropped at the start of 2013 and whilst the availability of attractive mortgages is stimulating property markets in touristic areas, Hollande clearly wants to re-invigorate domestic home sales too. Last year’s property tax changes put off many foreign buyers off buying French property and now with Hollande’s changes we may see some buyers return to the market.’
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