A flood of top-end properties are hitting the market as businessmen seek to leave France before stiff tax hikes hit, real estate agents and financial advisors say.
“It’s nearly a general panic. Some 400 to 500 residences worth more than one million euros ($1.3 million) have come onto the Paris market,” said managers at Daniel Feau, a real-estate broker that specialises in high-end property.
While it is not yet on the scale of the exodus of rich French after the election of Socialist president Francois Mitterrand in 1981, real estate agents said, the tax plans of France’s new Socialist President Francois Hollande are having a noticeable effect.
While the Socialists’ plan to raise the tax rate to 75 percent on income above 1.0 million euros per year has generated the most headlines, a sharp increase in taxes on capital gains from the sales of stock and company stakes is pushing most people to leave, according Didier Bugeon, head of the wealth manager Equance.
French entrepreneurs have complained vociferously against a proposal in the Socialist’s 2013 budget to increase the capital gains tax on sales of company stakes, which they argue will kill the market for innovative start-up companies in France.
Entrepreneurs in the high-tech sector in particular often invest their own money and take low salaries in the hope they can later sell the company for a large sum.
They say a stiff increase in capital gains tax would remove incentives to do this in France. They also argue that capital has already been taxed several times in the making.
The government has since backtracked, and Budget Minister Jerome Cahuzac pledged Friday to return to the status quo when someone who has created a company seeks to sell it later.
French officials are looking for ways to reduce the country’s excessive public deficit and debt, and Hollande won election on a platform of making the wealthy carry more of the load.
Bugeon said he was seeing start-up entrepreneurs looking to move their headquarters out of France and taking their families with them.
With the Internet “it is now possible to work in any corner of the world and come and spend one week a month in France,” said Thibault de Saint Vincent, president of Barnes France, the principal competitor to Daniel Feau.
“Those who are going abroad fear a future tax on capital movements,” he added.
Daniel Feau agreed that the profile of those who are leaving has changed, from the idle rich to “managers of major international corporations, entrepreneurs and investors much younger than previously who are scared of the marginal tax rate of 62.21 percent on sales of stock.”
The head of the French employers federation Medef, Laurence Parisot, has complained recently of emerging “anti-enterprise racism” in France.
No one is certain if the rush to the exit will continue, but Daniel Feau noted: “Nobody until now believed that the capital gains on shares would be taxed so high.”
And it is not only the Paris region, more offers are coming onto the market in other areas of the country as well, the realtors added.
The preferred destinations of those leaving are London, New York and Geneva, as well as Canada, Israel and Singapore, said Laurent Demeure, head of Coldwell Banker France.
He also noted that Brussels remains a favourite of those older, who have already sold their business interests, and are looking to benefit from Belgium’s lighter taxation of trusts to pass on inheritances to their children.
“Next year to have dinner with friends, instead of a taxi I’ll more likely need to take the Thalys for Brussels or the Eurostar to London,” joked Demeure, referring to high-speed trains that link the three capitals.
He said he is currently receiving on average one request per day to appraise a luxury apartment or home.
As a result, in the previous two to three months the price of large Paris apartments had slid by five percent.
The real estate agents don’t expect a collapse, however, as the offers to sell still remain low and interest by foreign buyers firm.
Finance Minister Pierre Moscovici said he has seen “no indication of a massive fiscal exodus”.
He told the daily Le Parisien that debate on the 75-percent income tax bracket was “closed” but noted that it was only a temporary tax for two years.
There’s no respite from Trump’s vindictiveness and foolishness
As we know, even in the midst of a national emergency, Donald Trump could find time and bandwidth to continue his retribution campaign.
He dismissed Michael Atkinson, the inspector general for the intelligence agencies, for doing “a terrible job,” satisfying his own thirst for vengeance for anyone who actually adhered to law and practice over blind loyalty to Trump himself. Indeed, asked about it the next day, Trump underscored his action by saying, Atkinson “was no Trump supporter, that I can tell you.”
It was an act that we once would have labeled corruption, by Democrats and Republicans – that is using the office for personal purposes – if Congress and too many Americans had not since become inured by so many like instances.
This is how Taiwan and South Korea bucked the global lockdown trend
As the coronavirus pandemic sparks global lockdowns, life has continued comparatively unhindered in places like Taiwan, South Korea and Hong Kong after their governments and citizens took decisive early action against the unfolding crisis.
At first glance Taiwan looks like an ideal candidate for the coronavirus. The island of 23 million lies just 180 kilometres (110 miles) off mainland China.
Yet nearly 100 days in, Taiwan has just 376 confirmed cases and five fatalities while restaurants, bars, schools, universities and offices remain open.
The government of President Tsai Ing-wen, whose deputy is an epidemiologist, made tough decisions while the crisis was nascent to stave off the kind of pain now convulsing much of the rest of the world.
Republican ex-lawmaker with coronavirus scolds Wisconsin GOP for forcing voters to risk their health
On CNN Tuesday, former Rep. Charlie Dent (R-PA), who is himself dealing with a bout of COVID-19, chastised the Wisconsin GOP for doing everything in their power to block the state elections from being moved — and forcing many voters to stand in line and risk exposure to the virus to cast their ballot.
"I have to tell you, here in Pennsylvania we have a Democratic governor and Republican legislature," Dent told host Don Lemon. "They postponed the election here from April 28 until June 2. Without any controversy. Everybody agreed it was the right thing to do and they moved on. I'm surprised Wisconsin took this risk, knowing they don't have to."