It seems that BritsÃ¢â¬â¢ love affair with property in France wonÃ¢â¬â¢t be dented by increased property taxes. UK buyers are still heading to France in significant numbers Ã¢â¬Ëwith the residential real estate sector proving a beacon of hope in a recuperating economyÃ¢â¬â¢, according to the Daily Telegraph.
Increases in the amount of tax property owners pay on rental income seems to have had little impact on demand for French property, with many British buyers looking to live in their home rather than to let it out. We look at the buoyant French property market next.
Buyers of French property not deterred by rising taxes
Ian Cragg from foreign exchange broker TorFX says that the poundÃ¢â¬â¢s increased strength in 2012 saw interest in French property remain strong. He said: Ã¢â¬ÅSterling reached a near four-year high of almost Ã¢âÂ¬1.30 against the euro in the summer of last year, with UK investors seizing the moment with a record number of transactions heading across the channel for property deposits and purchases.Ã¢â¬Â
And, it is in the cities that buyers may see the value of their French property rise in 2013. The latest report from the FNAIM (the body that represents French estate agents) forecasts a deflationary drop in property values across France of between 1 per cent and 5 per cent this year. However, the Telegraph reports that FNAIM believe there will be rebound gains of 3 per cent to 8 per cent in the major cities, led by the capital Paris.
A significant proportion of people buying property in France do so with the intention of moving into it in the short or medium term. Consequently, increases in the taxes on rental income havenÃ¢â¬â¢t had a huge impact on demand and arenÃ¢â¬â¢t a deterrent to buying.
Demand for French property remains and I expect the market to be relatively buoyant in 2013.
Author Nick Marr