Law change to boost French sale and leaseback property, says Pierre & Vacances
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The European property investments firm says the 'Amendement Bouvard' introduced on April 1 has brought the tax advantages of the 'Loi Scellier'to sale and leaseback properties in France and has boosted the holiday investment property sector.
The Loi Scellier introduced on January 1 this year enables tax residents in France to offset 25 per cent of the purchase price of unfurnished properties, up to £260,000, or £65,000 against their personal income tax over nine years.
The Amendement Bouvard has extended this tax incentive to furnished French sale and leaseback properties in tourism residences.
The Loi Scellier and Amendement Bouvard are only directly beneficial to French tax residents but Pierre & Vacances says overseas investors are positioning themselves to benefit indirectly from the supply and demand created by the law changes.
It says the new tax agreements that France has negotiated with Jersey, Guernsey and the Isle of Man, which will shortly come into effect will also have significant implications for investors in French property.
It will enable companies and trustees managing investment funds in these offshore territories to invest in French properties without having to pay the prohibitive annual tax of 3 per cent of their open market value.
Sykes Anderson Solicitors solicitor and chartered tax adviser David Anderson says: "The imminent removal of the annual 3 per cent tax for Jersey, Guernsey and Manx investors will be extremely positive for the French property market, specifically investment property. For the first time ever, a big pool of capital residing offshore will be able to flow into France."
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