Allez Le French Property Price Crash!

Sacre Bleu! It was just a couple of weeks ago that I warned HERE that French property prices would ( like those across much of Europe) crash. And it seems as if New French President Hollande is looking to  make my prediction come true rather sooner than expected. Today comes news of proposed (i.e. it will happen) tax charges on foreign (ie mainly British) owners of houses in France. Retrospectively from Jan 1^st 2012 the tax on rental income is to go up from 20% to 35.5% and CGT on such homes will go up in a month’s time from 19% to 34.5%. Ouch.

The CGT issue will be a red herring. It will raise sweet FA to try and fund Hollande’s crazy tax and spend economic policies. Because there are not going to be any gains to be taxed. The froggies themselves do not want to buy older houses in rural France. They are, and remain, heavy net sellers. And do you think that Brits (the only net buyers in volume in recent years) will be more or less likely to buy.   Supply and demand – there is stacks of supply ( and more after this as certain expats surviving only on the basis of gite income, fold and have to sell) and less and less demand. Chuck in huge tax increases for wealthier froggies which is bound to cause at least some of them to leave and we have a recipe for the merde hitting the fan in a perfect storm.

My call: French property prices to fall by 25-35% in Euro terms (more in real money)

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