Panic in paris? Wealthy french flee francois’ tax

Photo credit: Hans905

How many properties in Paris worth more than €1 million have been put up for sale since May? 400, according to one agent. Or, to put it another way, more than double the same period in 2011.

Why? Ask Francois Hollande. The Socialist President, elected earlier this year, has long been planning to raise taxes and levies for property owners, both foreign and domestic. Under the country's new austerity measures, those earning over €1 million will soon have to forfeit 75 per cent of their income, while others fear more charges on moving money overseas.

And now, as the deadline approaches, the French elite have had enough. They are upping baguettes and leaving, fleeing Francois' tax for friendly real estate markets, such as London, New York and Geneva.

High-end Paris agent Daniel Feau told the AFP: "It's nearly a general panic. Some 400 to 500 residences worth more than €1million have come onto the Paris market." And the profile of those who are leaving has changed, from the "idle rich" to "managers of major international corporations and entrepreneurs who are scared of a marginal tax rate of 62.21 percent on sales of stock".

But what is bad news for France's super-rich is good news for overseas investors. With so many properties hitting the market, the average price of Paris apartments has slipped by 5 per cent in recent months, low enough to keep generating interest from abroad.

"A large number of wealthy French families are leaving the country as a direct result of the proposals of the new government. These properties are then bought up by foreign investors looking for a stable real estate market like France to invest in," Alexander Kraft, head of Sotheby's French, told Paris-market-millionaires-flee-Hollandes-socialist-tax-hikes.html">The Daily Mail: "It shows the high-end property market is holding up very well, even in these difficult times."

When the tax proposals were first announced, David Cameron responded by promising to "roll out the red carpet" for high-end French investors looking to come to London. But if this exodus is real and continues for the next year, France's wealthy may unintentionally be doing the same thing.